empty
 
 
28.05.2020 09:18 AM
Trading plan for EUR/USD and GBP/USD on 05/28/2020

They have a plan. Let it not save the world, but only Europe, as much as 750 billion euros. And in general, as soon as the European Commission showed it to the world, a single European currency quickly moved up. But investors missed the good news, especially those that forecast the distribution of money. However, the single European currency began to pullback pretty quickly. Apparently, many investors remembered the previous plan, which as a result was sharply criticized by all kinds of Italy and Spain. After all, the previous plan implied the distribution of money through lending, and a number of European countries are already in debt. It has already reached the point that, despite negative government bond yields, these countries are not able to service their debt obligations. At least they are already close to this state. So they are clearly not encouraged by the new loans. And oddly enough, the plan of the European Commission just implies the allocation of aid through new loans. So the new wondrous plan may also be rejected. After all, the decision must be made unanimously. Nevertheless, the very fact that Europe is actively searching for economic salvation and is ready to allocate huge funds for this good cause has allowed the single European currency to strengthen noticeably.

This image is no longer relevant

The pound was unlucky because what happened to it is exactly what may soon happen to the single European currency namely, the collapse of hopes. The British authorities have long been convinced that the European Union is about to make concessions, and the trade agreement, which London and Brussels must sign by the end of this year, will be acceptable to the UK. It is understood that this agreement will not discriminate against the United Kingdom. But all hope went to dust. Europe does not intend to abandon its major plans to oust British capital from the European market. Many European countries intend to improve the position of their own companies at the expense of London. In general, it became known yesterday that Brussels refuses to make at least some changes to the previously proposed version of the trade agreement. And its essence is very simple, either London remains in the free trade zone, with all its rules and regulations that are written in Brussels, and then the meaning of Brexit is completely lost. Moreover, this option implies that either London will not be able to influence the adoption of certain economic issues at all or London loses access to the European market and gets acquainted with European ideas about free trade, with all its quotas and duties. In general, the first and the second options seem not good for the UK. Well, disappointed investors began to play again against the pound.

This image is no longer relevant

Today, many interesting macroeconomic data are published for a number of European countries. The largest economy in the euro area is the most interesting, especially since inflation data are published in Germany, which may show a slowdown in consumer price growth from 0.9% to 0.6%. This, of course, is far from deflation, but it is already very close to it. Moreover, in monthly terms, prices may decline by 0.1%. So we can say that deflation is already beginning. And whatever one may say, the importance of Germany is extremely high, so that a single European currency may be under some pressure.

Inflation (Germany):

This image is no longer relevant

However, the single European currency will not be sad for long. After all, just half an hour after the publication of inflation data in Germany, macroeconomic data for the United States will be published. It will be the dollar's turn to be sad. So, the second estimate of GDP for the first quarter should confirm the fact that the economy declined by as much as 4.8%. But the restrictive measures designed to contain the coronavirus epidemic, which all politicians blame for economic difficulties, were introduced only at the end of March. That is, at the very end of the block. It is unlikely that in less than two weeks a healthy and robust economy could have sunk so much. Rather, this suggests that the problems in the economy have been there for a long time. And they were serious. However, politicians refuse to acknowledge this. Otherwise, it turns out that they should be responsible for the unprecedented increase in unemployment, which continues to break all records. After all, the number of repeated applications for unemployment benefits should grow to 26,180 thousand. This will be a new record. Of course, the number of initial applications may decline to 2,120 thousand. But this is more than ten times the normal weekly value, especially since it doesn't matter how many people lose their jobs. What matters is how soon they can find a new one and the dynamics of the number of repeated applications clearly indicates that this is just a terrible situation. And no one wants to be responsible for it. These figures still need to be re-elected to all sorts of Congresses, Senates and White Houses there. But the bad news doesn't end there. Orders for durable goods should also fall by 19.0% which is generally not surprising. When people are left without a job and the prospect of finding a new source of livelihood, there is no time to buy serious equipment or new furniture.

Repeated Unemployment Claims (United States):

This image is no longer relevant

The EUR/USD currency pair managed to consolidate above the flat formation of 1.0775 / 1.1000 for the first time in a long time, signaling a possible breakdown. It can be assumed that the 1.1000 border will continue to exert pressure on market participants, which will be reflected in the variable chatter 1.0980/1.1040, where you should work on the breakdown of the established borders.

This image is no longer relevant

The GBP/USD currency pair managed to partially restore short positions, working out the resistance level of 1.2350. We can assume a variable chatter in the region of 1.2250/1.2290, as it happened in the period earlier. After that, we analyze the price consolidation points relative to the given boundaries and start working on the breakdown with a local move.

This image is no longer relevant

Mark Bom,
Analytical expert of InstaForex
© 2007-2024
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST
  • Chancy Deposit
    Deposit your account with $3,000 and get $8000 more!
    In March we raffle $8000 within the Chancy Deposit campaign!
    Get a chance to win by depositing $3,000 to a trading account. Having fulfilled this condition, you become a campaign participant.
    JOIN CONTEST
  • Trade Wise, Win Device
    Top up your account with at least $500, sign up for the contest, and get a chance to win mobile devices.
    JOIN CONTEST
  • 100% Bonus
    Your unique opportunity to get a 100% bonus on your deposit
    GET BONUS
  • 55% Bonus
    Apply for a 55% bonus on your every deposit
    GET BONUS
  • 30% Bonus
    Receive a 30% bonus every time you top up your account
    GET BONUS

Recommended Stories

Can't speak right now?
Ask your question in the chat.
Widget callback