Forex Analysis: EUR/USD

Forex Analysis EURUSD, March 12/2020 | SGT Markets Forex Broker

The EUR/USD exchange rate has struggled this week ever since Italy’s lockdown to prevent the spread of the coronavirus. With fears that Italy’s economic slowdown will have a negative impact on the Eurozone, market appeal for the single currency has been increasingly compromised.
Global stock markets have tumbled as investors fret about the coronavirus causing a world recession, and roughly $6 trillion of U.S. market value has been wiped out so far. Financial markets are predicting another big interest rate cut over the next weeks.

Oil prices collapsed 30% after Saudi Arabia stunned markets with a pledge to slash prices and boost production following the collapse of an OPEC supply agreement.

The Federal Reserve cut interest rates by half a percentage point. This is the not only the first unscheduled, emergency rate cut since 2008, but also is the biggest one-time cut since then. The new benchmark interest rate is a range of between 1% and 1.25%.

We are Neutral from Oversold. A wide area of volatility just opened, it ranges between 1.1490 and 1.11. In the first stage we expect E/U to consolidate around 1.137. Then, we think possible two scenarios: one is breakout of 1.15 with First Target in area 1.17; the opposite one is correction down to 1.127, relevant Demand Area before an eventual further correction on the downside.

Our special Fibo Retracement is confirming the following S/R levels against the Monthly and Weekly Trendlines obtained by connecting the relevant highs and lows back to 2012:

Weekly Trend: Neutral
1st Resistance: 1.1490
2nd Resistance: 1.1567
1st Support: 1.1370
2nd Support: 1.1268

EUR

Recent Facts:

24th of July, German Manufacturing PMI
Worse than Expected

25th of July, ECB Interest Rate Statement
European Central Bank signaled a future cut in its official interest rates to new record lows

22nd of August, German Manufacturing PMI
Better than Expected

2nd of September, German Manufacturing PMI
Worse than expected

30th of September, German Unemployment Change and German CPI (Inflation data)
Better than Expected

16th of October, CPI
Lower than expected

24th of October, German Manufacturing PMI
Worse than expected

30th of October, German Unemployment Change
Worse than expected

29th of November, CPI
Higher than Expected

3rd of January, German Unemployment Change
Worse than expected

24th of January, German Manufacturing PMI
Better than Expected

3rd of January, German Manufacturing PMI
Better than Expected

14th of February, German GDP
Lower than expected

18th of February, German ZEW
Lower than expected

24th of February, German Business Expectations
Better than Expected

25th of February, German GDP
Lower than expected

3rd of March, Eurozone CPI
Higher than Expected

USD

Recent Facts:

7th of June, Nonfarm Payrolls
Worse than Expected

12th of June, CPI
Lower than Expected

19th of June, FOMC Statement
Dovish (Interest Rate cut imminent)

25th of June, CB Consumer Confidence
Lower than Expected

27th of June, GDP data
As Expected

5th of July, Nonfarm Payrolls and Unemployment Rate
Nonfarm payrolls Better than expected but Unemployment Rate ticked up

11th of July, Core CPI
Higher than expected

16th of July, U.S. Retail Sales data
Better than expected

24th of July, German and Eurozone Manufacturing PMI data
Worse than Expected

26th of July, GDP data
Better than expected

31st of July, German Unemployment
Better than expected

1st of August, ISM Manufacturing PMI
Worse than Expected

5th of September, ADP Nonfarm U.S. ISM Non-Manufacturing PMI
Better than Expected

13th of September, U.S. Retail Sales data
Better than Expected

1st of October, ISM Manufacturing PMI
Worse than Expected

2nd of October, ADP Nonfarm Employment Change
Worse than Expected

4th of October, Unemployment Rate
Better than Expected

30th of October, GDP
Better than Expected

30th of October, Interest Rate
The Federal Open Market Committee cut its fed funds rate to a range of 1.5% to 1.75% from a previous range of 1.75% to 2.00%

1st of November, Nonfarm Payrolls, Unemployment Rate
Better than Expected

13th of November, CPI
Higher than Expected

15th of November, Retail Sales
Worse than Expected

27th of November, GDP
Better than Expected

6th of December, Nonfarm Payrolls, Unemployment Rate
Better than Expected

3rd of January, ISM Manufacturing PMI
Worse than Expected

10th of January, Nonfarm Payrolls
Worse than Expected

14th of January, CPI
Lower than Expected

30th of January, GDP
As Expected

5th of February, U.S. ADP Nonfarm Employment Change, ISM Non-Manufacturing PMI
Better than Expected

7th of February, U.S. Unemployment Rate
Higher than Expected

3rd of March, U.S. Fed Interest Rates
The Federal Reserve cut interest rates by half a percentage point. The new benchmark interest rate is a range of between 1% and 1.25%.

 

Forex Analysis: GBP/USD

Forex Analysis GBPUSD, March 12/2020 | SGT Markets Forex Broker

The Pound exchange rate remained largely flat after the Bank of England’s (BoE) emergency rate cut to cushion Virus Blow. The BoE became the latest central bank to slash interest rates, following in the US Federal Reserve.

Last UK Retail Sales data better than expected. Last UK Job Market data showed some resilience. Last UK GDP data ticked higher than expected but UK Manufacturing Production is doing very bad.

We are still Overbought. 1.32 is an important Resistance. Breakout of this level can lead the prices up to 1.3285, important Supply Area. As we wrote previously, we think more probable a correction on the downside with first target 1.275.

Our special Fibo Retracement is confirming the following S/R levels against the Monthly and Weekly Trendlines obtained by connecting the relevant highs and lows back to 2001:

Weekly Trend: Overbought
1st Resistance: 1.3203
2nd Resistance: 1.3285
1st Support: 1.2880
2nd Support: 1.2753

GBP

Recent Facts:

10th of July, Manufacturing Production data
Worse than Expected

16th of July, UK Job Market data
Worse than Expected

18th of July, Retail Sales
Better than Expected

5th of August, Services PMI
Better than Expected

9th of August, GDP data + Manufacturing Production
Worse than Expected

2nd of September, Manufacturing PMI
Worse than expected

9th of September, GDP and Manufacturing Production
Better than Expected

10th of September, Job Market
Better than Expected

18th of September, CPI
Lower than expected

19th of September, Retail Sales
Worse than expected

30th of September, GDP data
Higher than Expected

2nd of October, Construction PMI
Worse than expected

3rd of October, UK Services PMI data
Worse than expected

10th of October, GDP and Manufacturing Production data
GDP Better than Expected, Manufacturing Worse than expected

15th of October, Job Market
Better than Expected

15th of October, CPI
Lower than expected

7th of November, BoE Interest Rate Decision
Interest Rate Unchanged but two members of its monetary policy committee voted for a cut, the first time in over a year that the committee has been split

13th of November, CPI
Ticked lower, but still at 1.5%

22nd of November, Manufacturing PMI + Services PMI
Lower than expected

10th of December, GDP data
Worse than expected

12th of December, General Election
Leader of the Conservatory party, largely winning the UK elections, said that Britain would have enough time to strike an agreement with the European Union

19th of December, Retail Sales
Worse than expected

13th of January, Manufacturing Production
Worse than expected

17th of January, Retail Sales
Worse than Expected

24th of January, Manufacturing PMI + Services PMI
Better than Expected

30th of January, BoE Interest Rate Decision
BoE refrained from cutting interest rates. Policy makers voted 7-2 to keep the benchmark at 0.75%

11th of February, GDP
Higher than Expected

18th of February, Job Market data
Better than Expected

20th of February, Retail Sales
Better than Expected

11th of Match, BoE Interest Rates Decision
Bank of England’s (BoE) emergency rate cut

USD

See above.

Forex Analysis: AUD/USD

Forex Analysis AUDUSD, March 12/2020 | SGT Markets Forex Broker

Australia’s government said it would pump A$17.6 billion ($11.4 billion) into the economy to try to stop the coronavirus outbreak triggering a recession, as it weighed an extension of travel restrictions following a formal pandemic declaration. The country’s first stimulus package since the 2008 global financial crisis, which helped Australia avert a recession then, illustrates the lengths the government will take to pare the economic impact of the outbreak.

Oil prices collapsed 30% after Saudi Arabia stunned markets with a pledge to slash prices and boost production following the collapse of an OPEC supply agreement.

Last Australia GDP data ticked higher than expected.

U.S. Fed cut the rates to 1.25 bp though – in his last testimony – U.S. Fed’s Chair Powell suggested that there was little reason for the Fed to cut rates as the economy remained in a good place, despite the recent coronavirus outbreak. On the other hand, President Trump pushes for a relevant rates cut.

We are Oversold. AUDUSD sits on a Major Demand area, at the convergence of many trendlines and fibo levels. We expected a bounce up first and this occurred on 0.638 area, so now eyes again on that important Demand Area for a fast correction later (with First Target 0.646).

Our special Fibo Retracements are confirming the following S/R levels against the Monthly and Weekly Trendlines obtained by connecting the relevant highs and lows back to 2012:

Weekly Trend: Oversold
1st Resistance: 0.6630
2nd Resistance: 0.6710
1st Support: 0.6455
2nd Support: 0.6384

AUD

Recent Facts:

7th of May, Australia Retail Sales
Worse than Expected (weakest quarter in seven years)

13th of May, Home Loans
Worse than Expected

16th of May, Unemployment Rate
Higher than expected

4th of June, Retail Sales and RBA Interest Rate Statement
Retail Sales Worse than Expected, RBA cuts interest Rates as expected at 1.25%

5th of June, GDP
Worse than Expected

13th of June, Employment Change
Better than Expected

3rd of July, Australia Trade Balance and Building Approvals
Better than Expected

4th of July, Australia Retail Sales
Worse than Expected

18th of July, Job Market data
Worse than Expected

31st of July, CPI
Higher than Expected

2nd of August, Retail Sales data
Better than Expected

3rd of September, Retail sales
Worse than Expected

18th of September, job Market
Worse than Expected

17th of October, Employment Change
Worse than Expected

4th of November, Retail Sales
Worse than Expected

14th of November, Employment Change
Worse than Expected

4th of December, GDP
Lower than Expected

5th of December, Retail Sales
Worse than Expected

10th of January, Retail Sales
Better than Expected

23rd of January, Employment Change
Better than Expected

29th of January, CPI (Inflation) data
Higher than Expected

6th of February, Retail Sales
Worse than Expected

20th of February, Employment Change
Better than Expected

3rd of March, RBA Decision on Interest Rates
Bank of Australia (RBA) cut its official cash rate (OCR) by 25bps to a record low of 0.50%.

4th of March, GDP
Better than Expected

USD

Recent Facts:

See above.