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April 11, 2020

First, a review of last week’s events:

  • EUR/USD. The Old and the New Worlds continue to compete to see who will pour more money into their economies. But what is the old Europe compared to the United States! On Thursday, April 10, after many days of discussion, the EU Finance Ministers narrowly reached a compromise, concluding a deal on measures to support their countries in the amount of "some" €500 billion. At the same time, the US Federal Reserve announced the launch of another $2.3 trillion support program. At the same time, the Head of the Federal Reserve, Jerome Powell, said that his Department will most likely not stop there and will do everything in order to restore the US economy as quickly as possible after the epidemic.
    Powell is to be trusted in this regard. And the point here is not only the COVID-19, but also that 2020 is the year of the next US Presidential election, and Donald Trump really wants to stay in the White House for a second term. The growth of the US economy has been a major asset in his fight for the presidency.
    The unwinding flywheel of the quantitative easing program in the United States could not but put pressure on the dollar, and the USDX index closed trading below the psychological level of 100.0 on April 09. As for the EUR/USD pair, the dollar began to retreat starting from Monday. However, this retreat was not as panicky as in the last week of March, when the pair overcame 510 points. Now the euro has grown by less than 200 points, after which the pair ended the five-day period in the 1.0940 zone, and did not reach the landmark level of 1.1000;
  • GBP/USD. The dollar retreated against the pound as well. Besides the above, an additional factor that supported the British currency was the continued growth of borrowing rates in pounds in London and a decrease in borrowing rates in US dollars.
    Recall that, giving a forecast for the past week, 20% of analysts had expected the continuation of the sideways trend of the pair in the range of 1.2245-1.2485, and another 30% – its movement from the lower to the upper border of this channel, indicating the level of 1.2475 as resistance. As a result, the overall forecast of these experts turned out to be correct: having failed to fall below the support of 1.2200, the pair turned north and ended the trading session at 1.2470;
  • USD/JPY. 60% of analysts had expected this pair to break the 108.70 resistance and the dollar to strengthen to the level of 111.65. The breakthrough occurred, however, the volatility of the Japanese currency was surprisingly low, and the growth of the pair stopped at the height of 109.37, after which it returned to where it started on Monday, to the zone of 108.40;

As for the forecast for the coming week, summarizing the opinions of a number of experts, as well as forecasts made on the basis of various methods of technical and graphical analysis, we can say the following:

  • EUR/USD. Needless to say, the situation with the coronavirus epidemic in the United States is very difficult, and the economy of this country is teetering on the verge of a deep depression. To support its producers, the Fed has launched a quantitative easing program and, starting on March 16, has already purchased $1.19 trillion in Treasury bonds. The regulator will buy more securities worth $150 billion next week, which will continue to put pressure on the dollar. This is why 65% of experts expect the EUR/USD uptrend to continue. The resistance levels are 1.1000, and 1.1240 1.1150.
    On the other hand, the dollar is still the best currency during the crisis. It was this fact that stopped its active sales last week and is quite capable, according to the remaining 35% of analysts, to reverse the trend to the south again. The targets are 1.1100 and 1.1175;
    One can understand what the indicators show just by looking at the charts of the pair. On D1, everything is quite colorful­: there are about the same amounts of green, red and neutral gray colors. On H4, of course, green dominates, but 25% of the oscillators are already in the overbought zone.
    As for the macroeconomic indicators, one should first of all pay attention to the retail sales and the number of initial unemployment claims in the US, which will be known on April 15 and April 16, respectively. Also, the data on China's GDP will help to assess the impact of the coronavirus on the economy, which will be released on Friday April 17;
  • GBP/USD. The British currency is now in good demand due to the difference between the rates for the pound and the dollar in the interbank lending market. However, everything can change in an instant. That is why experts' forecasts cannot be brought to any common denominator: 40% vote for the pair's growth, 35% – for its fall, and 25% simply shrug their shoulders.
    The pair is in the side channel for the second week, holding in the range of 1.2200-1.2485, and it will start from its upper border on Monday, April 13. Graphical analysis on H4 shows its further growth to the horizon of 1.2600 and a subsequent fall to the support of 1.2200. The range of fluctuations is slightly larger on D1: first rising to the height of 1.2650, and then falling to the level of 1.2175. The situation with the indicators is generally similar to the readings on the EUR/USD, 25% of the oscillators on both timeframes indicate that the pair is overbought;
  • USD/JPY. The number of dollars in the global financial system, the yield on the US Treasury bonds, stock indices and oil quotes, the state of the economy of China - all these factors affect the attractiveness of the yen as a safe haven currency. The zero result of the USD/JPY pair last week indicates that the market has not yet decided what to do with the Japanese currency, buy or sell. Most likely, we should not expect any independent movements from this pair, and its dynamics will reflect the overall market mood relative to the US dollar.
    Meanwhile, 60% of experts vote for a further weakening of the dollar and the fall of the pair to around 107.00. The next support is in the 104.75-105.15 zone. The alternative view is supported by 40% of analysts. Resistance levels are 109.35, 110.15 and 111.70; 


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