GBP/USD. Result of the week. Michel Barnier: the UK refused to extend the terms of the "transition period"

24-hour timeframe

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The British pound was trading fairly calmly against the US currency last week. Only on Tuesday, the pound/dollar pair showed quite high volatility, about 200 points, and on all other days, there were standard 100-130 points. Judging by the 24-hour timeframe, it is now impossible to say unequivocally that the upward trend is complete. Moreover, the lines of the Ichimoku indicator are now lined up in such a way that it is very difficult to say what is happening on this chart right now? Formally, the price is located above the Kijun-sen and Senkou Span B lines, so the pair has prospects for an upward movement. However, the quotes are only slightly higher than the Ichimoku cloud, and it is not that they are fixed higher, but the cloud itself has gone below the price. The Bollinger Bands have narrowed to a minimum and now signal a sharp drop in volatility, the absence of a trend movement, and the possible beginning of a flat. So, in the long run, the situation is confusing. We still recommend trading on a 4-hour chart, where the picture is clearer. The macroeconomic and fundamental background is still ignored by market participants.

Meanwhile, the second round of talks between the groups of Michel Barnier and David Frost on the future relationship between Britain and the EU after Brexit started this week. Earlier, Brussels and London agreed to continue negotiations in video format and hold a new round every month. However, the negotiation process that ended this week showed that the parties continue to be at different poles of the planet, despite all the assurances about "progress in the negotiations". Michel Barnier on Friday officially announced that London refused to extend the duration of the "transition period". Thus, the final break between the Kingdom and the Alliance will occur on December 31, 2020, no matter what. The head of the EU negotiating team also accused Britain of delaying the process of negotiating future agreements that will take effect after December 31. Moreover, according to Barnier, the UK does not deal with the issues necessary to negotiate a trade agreement. "The UK does not want to make serious commitments on a number of fundamental issues," Barnier said. The diplomat also listed areas where progress has not been made: equal and fair terms of cooperation, post-Brexit partnership management, judicial cooperation, and access to fishing waters. If the first two areas are not obvious, the last two are absolutely clear. The division of UK fishing waters has been a stumbling block from the very beginning, since the EU wants to maintain access to them and have the right to fish in any quantities, which, of course, the UK wants to avoid, so that the caught fish can then be sold to the EU. The stumbling block with the judicial system is also obvious. The EU wants the European Court of Justice to have the final say in resolving any disputes, which, again for obvious reasons, London does not want. Thus, Michel Barnier summed up: Britain has set its reluctance to extend the "transition period" very short deadlines for negotiations, while there is no progress in the negotiations themselves, and London "does not particularly want to move forward". Barnier also noted that London "refused" to compromise on creating conditions for doing business, on the free movement of people, goods and services, on the development of veterinary and sanitary control regime on the border between Ireland and Northern Ireland.

Meanwhile, Michel Barnier himself believes that in the context of a pandemic, the parties need to mitigate the economic shock. "It is unacceptable to amplify it with the shock of breaking economic ties without an agreement," the EU's chief negotiator said. According to Barnier, in early June, the European Union will reassess the situation depending on the progress made, but regardless of the results, the UK will not participate in the long-term plan for economic recovery after the pandemic. The main complaint to London calls the lack of desire to compromise and the lack of proposals put forward.

At the same time, the "coronavirus" pandemic in the UK is not slowing down. Despite reports that the pandemic is receding in many EU countries, in Britain the number of deaths from the virus over the past day was 684, which is 68 more deaths than a day earlier. The number of new cases of "coronavirus" infection is 5,386, which is again more than the day before. The total number of infected people in the country is already 144,000, the number of deaths - almost 20,000.

The British pound has been experiencing market pressure again in recent weeks, but the reasons do not lie in the scale of infection or in macroeconomic statistics. This week in the UK there were both bad reports and good ones. However, market participants did not react to either the first or the second. There are very few fundamental news and events in the Foggy Albion right now. For example, we do not receive any information about the stimulus packages for the British economy or about the actions of the government or the Bank of England. Therefore, market participants are deprived of fundamental feed.

Trading recommendations:

On the 24-hour timeframe, the pound/dollar pair is adjusted against the upward trend. However, the more accurate picture is now on the 4-hour timeframe, which we recommend considering first. The reversal of the MACD indicator down on the current timeframe signaled the beginning of a correction. All targets are very long-range, formed during the panic. It is unlikely that they will be worked out this month.

The material has been provided by InstaForex Company - www.instaforex.com

EUR/USD. Result of the week. The unique Donald Trump shocked doctors with his next statement on "coronavirus"

24-hour timeframe

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Another trading week on the Forex market has ended, and we are summarizing its results. The EUR/USD currency pair was in a downward trend for most of the trading week. Thus, the downward trend continues and the signal from Ichimoku "dead cross", which was formed on March 20, continues to be processed. The pair's volatility has decreased to acceptable levels and is no longer shocking market participants with its values. We can say that now the pair is almost in a normal, calm trading mode. The only thing is that traders continue to persistently ignore all the macroeconomic statistics in the world. This week, there were quite a large number of macroeconomic reports and none of them fully caused a reaction from the markets. Thus, this moment continues, on the one hand, to facilitate trading, since the potential points of reversal have become much smaller, and on the other hand, it has become more difficult to predict the future movement of the pair, since it is not clear what factors the markets rely on when making trading decisions. Thus, now the best strategy can be trading on the trend strictly according to technical indicators.

We will not list all the reports published over the past week, as they still had no meaning for the currency pair. We continue to maintain the view that all the statistics now falling into the hands of traders are only relevant for understanding the scale of losses caused by the "coronavirus" epidemic. There is no shortage of other news either. After all, the whole world has Donald Trump – an American President who knows everything in the world. From the speeches and statements of the US leader, it has long been possible to compile a book of catchphrases. A few months ago, the Washington Post estimated that Donald Trump on average lies 14.7 times a day. By the word "lies" the newspaper means deliberate or unspecial misrepresentation. In the topic of "coronavirus", Trump simply breaks all records, making statements that contradict each other, which are impossible to understand. For example, at the very beginning of the epidemic, when the virus was just developing in the United States, the American President repeatedly stated that "Americans have nothing to fear", and "the virus will not survive the warm season". A little later, when it became clear that the COVID-2019 virus is not a cold or flu, the American President made statements in the style of "it will be difficult, but the American nation will cope with everything". This was followed by grim predictions that "up to 200,000 Americans could die", naturally served with the sauce "if the US government did nothing, the number of victims was estimated in the millions". It also turned out that Trump "knew everything at the very beginning of the epidemic," but "did not want to deprive the American population of hope." It is not clear what hop are we talking about here. We are talking about the fact that if the American President had attached more importance to the pandemic and did not make frivolous statements, then perhaps there would not have been 890,000 infected and 50,000 deaths in the United States now.

But Trump made the most "loud" statement at one of the last briefings in the White House, proposing his own way to fight the "coronavirus". According to the latest research, which was presented by Trump himself, the virus weakens under sunlight, when air humidity increases, and when it is heated. The more these factors simultaneously affect the virus, the faster it dies. Also, "coronavirus" can not tolerate the impact of bleach, dying from it in 5 minutes, and even faster - from isopropyl alcohol. Based on this information, Trump suggested that the body of a person with a virus can be illuminated by ultraviolet or other powerful light. Light is offered inside the person, through the skin, or "in some other way". "And here's another thing. The disinfectant kills the coronavirus in a minute. In one minute! Is there a way to do something like an injection inside or some kind of cleaning? It would be interesting to check this out," - a direct speech by Donald Trump. A curtain. This is the speech of the president of the country, which is watched by a huge number of Americans. Now the question is: how many Americans will take this speech as advice and go to drink bleach? Of course, this is ironic and we hope that there will be no victims, thanks to the advice of Trump. However, representatives of the medical field are already horrified, as they believe that certain individuals can start following the recommendations of Donald Trump. Doctors warn: ingestion of any disinfectant can lead to fatal consequences. John Balmes, a San Francisco-based pulmonologist, warned that even inhaling the fumes of bleach or isopropyl alcohol, let alone being injected into the body, would cause serious health problems. By the way, this warning of doctors looks ridiculous, but it is not superfluous. For example, in Iran, where the use of alcohol is prohibited by Sharia law, at the end of March, 300 people died who decided to disinfect their bodies by drinking methanol. More than 1,000 were injured. The same applies to sunlight or any other light that, according to Trump, can help with the treatment of "coronavirus". Doctors said that all attempts to treat with light will only lead to burns of varying severity and the development of cancer. "Trump's proposals for treatment with the sun and disinfectants do not make sense," all as one, according to doctors. "Trump is absolutely wrong and irresponsible. Sanitizers kill the virus, that's for sure. But when you are infected with it, the coronavirus settles in your cells. And if you use one of the methods to kill the coronavirus in your own cells, then you will die along with the coronavirus," says Dr. Eugene Gu, whose laboratory conducts tests for "coronavirus." It seems that Trump was later explained the absurdity of his statements. The American President said that his statement was sarcasm. "I asked this question to reporters like you with sarcasm to see what would happen," Trump said. Judge for yourself how appropriate sarcasm is on the topic of an epidemic that has engulfed the entire world...

From a technical point of view, the euro/dollar pair has every chance to continue moving down. However, on the 24-hour timeframe, the indicators are still at the stage of getting back to normal. The Bollinger bands continue to narrow, and the Ichimoku indicator lines continue to form a more or less familiar pattern. Therefore, we still recommend trading using 4-hour or lower timeframes, where the picture is clearer. After a two-month "storm" in the currency market, the pair's quotes finally calmed down and returned to the levels from which everything started about 2 months ago. In other words, neither the euro currency nor the dollar has lost much over the past 8 weeks.

Trading recommendations:

On the 24-hour timeframe, the euro/dollar pair continues to trade near the critical line. We still believe that it is best to trade using a 4-hour timeframe analysis, since there is no trend on the current chart. On the 4-hour chart, traders need to overcome the critical Kijun-sen line to expect further strengthening of the US dollar. At the end of this week, a fairly strong correction of the pair began.

The material has been provided by InstaForex Company - www.instaforex.com

Comprehensive analysis of movement options for #USDX vs EUR/USD vs GBP/USD vs USD/JPY (H4) on April 27, 2020

Minuette operational scale (H4)

Start of a correction? Options for the development of the movement of major currency instruments #USD vs EUR/USD vs GBP/USD vs USD/JPY on April 27, 2020 in a complex form

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US dollar index

The development of the movement of the dollar index #USDX from Monday, April 27, 2020, will be determined depending on the development and direction of the breakdown of the range:

  • resistance level of 100.87 - UTL control line of the Minuette operational scale forks;
  • support level of 100.30 - the border of the red zone of the Minuette operational scale forks.

The breakdown of the border of the red zone of the Minuette operational scale forks - support level of 100.30 - the development of the downward movement of the dollar index will be sent to the borders of the channel 1/2 Median Line (100.05-99.85-99.55) and equilibrium zone (99.70-99.30-98.95) of the Minuette operational scale forks.

Breakdown of the UTL control line of the Minuette operational scale forks - the resistance level of 100.87 - option for the development of the upward movement #USDX to the goals:

  • SSL start line (101.30) of the Minuette operational scale forks;
  • the lower boundary of the channel 1/2 Median Line Minute (102.45).

Details of marking the movement of the dollar index from April 20, 2020 are presented on the animated chart.

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Euro vs US dollar

The development of the movement of the single European currency EUR/USD from April 27, 2020 will also be determined by the development and direction of the breakdown of the range:

  • resistance level of 1.0820 - lower border of the channel 1/2 Median Line Minuette;
  • support level of 1.0775 - lower border of the channel 1/2 Median Line Minute.

In case of breaking the lower border of the channel 1/2 Median Line Minuette - resistance level of 1.0820 - option of the movement of a single European currency within the boundaries of the channel 1/2 Median Line (1.0820-1.0845-1.0875) and equilibrium zone (1.0860-1.0900-1.0940) of the Minuette operational scale fork with the prospect of achieving the upper border of the channel 1/2 Median Line Minute (1.0960) and the local maximum 1.0990.

When breaking the lower border of the channel 1/2 Median Line Minute - support level of 1.0775 - the downward movement of EUR/USD can continue to the control line LTL (1.0727) of the Minuette operational scale fork with the prospect of reaching the price of the instrument's minimum of 1.0636.

Details of the EUR/USD movement options are shown on the animated chart.

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Great Britain pound vs US dollar

The movement of Her Majesty's currency GBP/USD from April 27, 2020, as well as in the first two cases, will be due to the development and direction of the breakdown of the range:

  • resistance level of 1.2350 - initial line of SSL of the Minuette operational scale fork;
  • support level of 1.2270 - control line LTL of the Minuette operational scale fork.

Breakdown of the initial line of SSL of the Minuette operational scale fork - resistance level of 1.2350 - option to continue the development of the upward movement of GBP/USD to the borders of the channel 1/2 Median Line (1.2435-1.2495-1.2545) and equilibrium zones (1.2585-1.2660-1.2735) of the Minuette operational scale fork.

The breakdown of the LTL control line of the Minuette operational scale forks - support level of 1.2270 - together with the update of the local minimum of 1.2246 - an option to continue the development of the downward movement of Her Majesty's currency to the goals:

  • minimum of 1.2165;
  • SSL start line (1.2097) of the Minuette operational scale forks;

With the prospect of reaching the upper boundary of the channel 1/2 Median Line Minute (1.1850).

Details of the GBP/USD movement can be seen on the animated chart.

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US dollar vs Japanese yen

Starting April 20, 2020, the movement of the "Land of the Rising Sun" USD/JPY currency will be determined by working out and the direction of the breakdown of the boundaries of the equilibrium zone (107.10-107.90-108.70) of the Minuette operational scale forks - the options for working out the borders of this channel are shown in the animated graph.

In case of breakdown of the lower border ISL61.8 of the equilibrium zone of the Minuette operational scale forks - support level of 107.10 - the development of the currency of the "Land of the Rising Sun" will begin to flow in the channel 1/2 Median Line (107.10-105.85-104.60) of the Minuette operational scale forks.

And if there is a break of the top border ISL61.8 zone equilibrium of the Minuette operational scale forks - resistance level of 108.70 - then the development of the upward movement the USD/JPY may continue to order:

  • warning line UWL100. 0 (111.00) of the Minuette operational scale forks;
  • final line FSL Minuette (111.25);

With the prospect of reaching a maximum of 111.72.

Details of the USD/JPY movement are shown on the animated chart.

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The review is compiled without taking into account the news background, the opening of trading sessions of the main financial centers, and is not a guide to action (placing "sell" or "buy" orders).

Formula for calculating the dollar index:

USDX = 50.14348112 * USDEUR0.576 * USDJPY0.136 * USDGBP0.119 * USDCAD0.091 * USDSEK0.042 * USDCHF0.036.

Where the power coefficients correspond to the weights of currencies in the basket:

Euro - 57.6 %;

Yen - 13.6 %;

Pound sterling - 11.9 %;

Canadian dollar - 9.1 %;

Swedish Krona - 4.2 %;

Swiss franc - 3.6 %.

The first coefficient in the formula brings the index value to 100 on the starting date - March 1973, when the main currencies began to be freely quoted relative to each other.

The material has been provided by InstaForex Company - www.instaforex.com