Fibogroup Market Analysis 2020

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Pound jumps on Brexit breakthrough

The British Pound is trading steadily in today’s trading session, after yesterday's jump following news of a further easing in lockdown measures surrounding the coronavirus and speculation of potential compromise in trade negations between the EU and the UK surrounding Brexit.


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Pound jumps on Brexit breakthrough, Analyst Andrew Masters

The British Pound is trading steadily in today’s trading session, after yesterday's jump following news of a further easing in lockdown measures surrounding the coronavirus and speculation of potential compromise in…

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Market Watch
Discovering the vaccine

One of the main topics in the past few weeks remains a phased plan for most countries to exit the quarantine measures. But as we can see now, business activity is still very weak. Nevertheless, investors are optimistic, because a number of large companies have announced some positive results regarding vaccine testing. As a result, the US stock market has returned into positive territory, and we are also seeing a general strengthening of risky currencies such as AUD and NZD.

Let me remind you that yesterday the US published consumer confidence figures, which, unfortunately, came in under expectations, thereby once again confirming that the recovery process will take a lot of time. As a result, we observed a moderate weakening of the USD along with most currencies.

I also draw your attention to the escalation of the conflict between the United States and China. Protests in Hong Kong reduce investor interest in this financial Hub which in turn contributes to the flow of capital to the United States, thereby supporting the US stock market.

Despite all this, the risk of the second phase of the crisis remains elevated, as indicated by the demand for gold, which is still trading above the psychological level of $ 1,700 per ounce.

And now we turn to the comments from the head of the ECB. She stated that the “soft” scenario of the ECB is now outdated. The economic downturn is now seen somewhere between the “medium” and the “serious” scenario. The point is that, according to the latest results for this year, the economy of the currency block will shrink from 8 to 12% but even so the market reacted very calmly to this statement. The Euro currency pairs trading volatility remained within the average indicators, indicating that traders understand this and have taken this into account.

Also, Christina Lagarde said that after the pandemic there will be no new debt crisis, thereby providing moderate support for EUR.

I will complete today's review with the “black gold” market. The price of American grade WTI returned to the technical resistance level at $ 34.5 per barrel. Further growth will require a strong bullish fundamental factor. Therefore, there is a risk of a moderate decline in oil prices.

The above review is not a direct guide to trading, and can only be classed as a recommendation.
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Repair and Prepare: EU unveils 750 bln euro plan for coronavirus recovery

On Wednesday the European Commission announced an anti-crisis plan, under which it will pay the EU countries €750 billion (instead of €500 billion) in the form of grants and loans.
Most of the money will go to Italy and Spain, as the countries most affected by the pandemic. Together, these 2 countries will receive grants and loans in the amount of €313 billion.
Altogether, this European recovery plan will provide 1.85 trillion euros to help launch the economy and ensure further development of Europe.
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#EURUSD reacted with growth to such a statement and reached our previously announced target at 1.10. Against the background of a wider volume of incentives (750 billion instead of 500 billion), further growth of #EURUSD is quite natural.
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Australian dollar completes virus recovery

The Australian dollar has now completed in what some are calling the “coronavirus recovery” which means it is back to levels seen before the virus took hold of the global economy which saw some currencies such as the Aussie face major volatility fall to multi decade lows.


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Australian dollar completes virus recovery, Analyst Andrew Masters

The Australian dollar has now completed in what some are calling the “coronavirus recovery” which means it is back to levels seen before the virus took hold of the global economy which saw some currencies such as the…

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Swiss Bank sells off CHF

Yesterday, the head of the Swiss National Bank (SNB), Thomas Jordan, spoke about the state of the monetary policy in Switzerland - the main message is that now it is time to more actively regulate the region's monetary policy. This is primarily due to the fact that against the background of lower rates and negative returns worldwide, the deposit rate of 0.75% and even in such a reliable currency as CHF provokes an increase in the national currency.
An increase in the value of the franc is detrimental to the entire economy, and especially to Swiss exporters.
The immediate measures voiced by the head of the SNB are:
- Key rate reduction at the next meeting;
- Balance expansion (i.e. there will be more Swiss francs).
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We are waiting for sharp pulses up on these drivers.
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Brexit: deadlock again

Recently the media reported that British Prime Minister Boris Johnson is planning to fly to Brussels in the second half of June. However, there are no special changes in the exit procedure as of today. Both sides cannot agree among themselves and continue to pull a strap.
It is unlikely that the situation will radically change in the near future. It feels like the British, under the pretext of total quarantine, decided to delay this event even further.
The statement by the Central Bank manager of England, Andrew Bailey, adds even more uncertainty: “The key rate of England could go down and this issue was relevant earlier. However, now there is no particular sense in this”.
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We believe that political factors can be completely discounted and not taken into account. And here is the rhetoric to not reduce the key rate to use as the key driver of growth #GBPUSD all June.
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Chinese gambit: US imposes sanctions on China

Washington blacklisted 33 Chinese companies, almost all specializing in computer technology and software. The pretext for these sanctions was the "oppression of the Uyghurs" in the country. However, the most likely reason is that Beijing violated the Hong Kong transfer agreement. I think from this and the next round of confrontation between the United States and China will begin after a six-month break.
It must be understood that this is not a one-goal game - the People’s Bank of China is slowly but surely devaluing the yuan, the rate of which has already reached its minimum since the 2008 crisis. For the American economy it is very painful, trade with the region is becoming unprofitable.
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America needs a weak dollar like air and they are doing everything possible to achieve this goal. In particular, today Donald Trump announced the holding of a press conference on China. We are waiting for ardent statements about "genocide" and other flashy phrases in the best traditions of Donald.
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Oil to suffer long term

The oil price is down more than 1 percent in today’s trading session as the market digested the news on bigger than expected oil inventories in the US which raised concerns that demand was starting to slide.

Read the full version:

Oil to suffer long term, Analyst Andrew Masters

The oil price is down more than 1 percent in today’s trading session as the market digested the news on bigger than expected oil inventories in the US which raised concerns that demand was starting to slide. The U.S…

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#fibogroup #US #oil

 

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Market Watch
Canadian GDP

The world economy is on the verge of collapse with most countries showing record declines, but the situation in the stock markets remains relatively stable. Oil prices are recovering despite the unexpected growth in stocks.

Let me remind you that yesterday the US Department of Energy recorded an increase in oil reserves of almost 8 million barrels, while analysts predicted a decrease of 2.5 million which means the forecast was missed by more than 10 million barrels. In any case the price of WTI crude oil continued to rise. All this indicates that traders and investors are extremely optimistic about the near future.

The expectation of a rapid recovery in the global economy is one of the key bull drivers for the black gold market. At the same time, it is already evident that the reduction in oil production in the framework of the OPEC+ deal, which entered into force on May 1, is not able to fully compensate for the decrease in physical demand for oil. As a result, the risk of a short-term decline in oil prices remains elevated.

I also draw your attention to the published report on inflation figures in the eurozone which came in as analysts had expected and so the market remained quiet. Therefore, only a weakening of the USD can provide the necessary support to the EUR/USD currency pair to reach the target level of 1.1145.

Now let's move on to the upcoming publication of GDP in Canada. This release is very important, as even rising oil prices can’t provide significant CAD support. Let me remind you that economists expect a decrease in GDP by 10% in March which is a strong bearish factor for CAD. Therefore, if the GDP figures come in below expectations the CAD may come under pressure at the time of release.

And we will complete today's review with an analysis of a transaction for the purchase of a EUR/USD currency pair in the amount of 2 lots from the technical support level of 1.1000. Let me remind you that this level served as a resistance for a long time. The Take Profit order was set at the next technical resistance level of 1.1075.The Stop Loss order at 1.0975. The profit on this transaction amounted to $1,500, which amounted to three times the risk.

The above review is not a direct guide to trading, and can only be classed as a recommendation.
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USA: GDP fell 5% in the 1st quarter

Preliminary US GDP data released yesterday showed a 5% decline. This is the first quarterly contraction of the economy since the beginning of 2014, as well as the lowest since the fourth quarter of 2008. Then, against the backdrop of the financial crisis, the economy fell 8.4% year on year.
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This data has little effect on the dynamics of the US dollar, however, it can be used at the time of publication of similar data in other countries. With more positive indicators, it is possible to strengthen the growth of the national currency, the GDP of which will be published.
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