Trading idea for May 1, 2020. EUR/USD. Euro growth. Coronavirus updates.

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EUR/USD surged after the weak report on the US labor market.

Neither the Fed nor the ECB statements impressed the EUR/USD pair, but the new jump on US unemployment dragged USD down.

New jobless claims in the US amounted to 3.8 million last week, much higher than forecasts.

Long-term unemployment, meanwhile, recorded 18 million.

(Everyone has their own scales. In India, unemployment reached 140 million).

Thus, demand for the euro arose. Keep purchases from 1.0850, stop at 1.0830.

Euro rally may begin.

Coronavirus updates:

In mainland Europe, countries are steadily emerging from the epidemic: daily deaths in Italy, Spain and France already dipped below 300. Britain, on the other hand, remains worse, with approximately 670 deaths per day.

In the US, new infections have long been stabilized, but the number of active cases still does not decline. Fatality is also high at a level of 2,200 per day, but this is due to the situation on other states, as New York's situation is already steadily improving.

Trump continues advocating the abolition of quarantine measures amid concerns on the unfinished pandemic.

Update on Russia will be featured in the Trader's Diary review at 8:30 or 10:00 London time, depending on the release of new reports.

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Trading idea for the USD/JPY pair

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Good afternoon traders! Happy spring and labor day!

Here's a trading idea for the USD/JPY pair.

A strong bullish impulse at the US session yesterday strengthened the dollar against yen and gold. I suggest viewing the outcome as wave "A" of the classic "ABC" pattern.

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Conduct a long trade to increase quotes to the area of the round level of 108.

Potential movement is more than 1000p. However, the long scenario will be cancelled if yesterday's long impulse is broken down. The idea is medium-term, with the position moving over the weekend, but you can still work on it on Monday, if the prices are favorable.

"Price Action" and "Stop Hunting" methods were used for the trading idea.

Profitability is 1 to 2, but can increase at better call prices.

Good luck!

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

Trading plan for EURUSD for May 01, 2020

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Technical outlook:

The EUR/USD pair dropped to 1.0830 level yesterday before reversing higher again. We anticipated a retracement towards 1.0800 level but the pair went up. The pair is seen to be trading around 1.0954 levels at this point in writing and might be targeting resistance at 10990 as highlighted on the chart. A corrective drop seems to be due either from current levels or from 1.0990 level respectively. Prices are expected to drop around the back side of resistance turned support trend line around 1.0820/25 levels before resuming an upward trend again. The overall structure remains bullish until prices stay above 1.0636 level. EURUSD is targeting resistance at 1.1500 level. It might be preparing for an uptrend that could last for several months.

Trading plan:

Remain long and buy more on drop towards 1.0820/25, stop 1.0636, target is 1.1500

Good luck!

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AUD/USD. Buy on declines: Aussie retains potential for growth

The AUD/USD pair ignored the greenback's decline from yesterday, which was caused by profit-taking on the last day of April and the Federal Reserve's unexpected decision to expand the lending program. But the aussie did not become the beneficiary of the current situation – it retreated from positions it won against the greenback, although it steadily strengthened for almost two weeks, reaching a one-and-a-half-month price high of 0.6571. The long-term intentions of buyers of AUD/USD are obvious – to return the pair above the 70th mark, that is, to the range of 0.70–0.73, within which the pair was trading for many months before the coronavirus crisis.

In general, the fundamental background contributes to the aussie's growth - primarily due to a decrease in the spread of COVID-19, due to the easing of restrictive measures in China and Australia, and an unexpected increase in Australian inflation in the first quarter. While the excitement around the US currency has significantly decreased, the Fed is pumping markets with liquidity, demonstrating softness in conducting monetary policy. All this suggests that the Reserve Bank of Australia at its next meeting (which will be held on May 5, that is, next Tuesday) will take a wait-and-see position, and perhaps hint at an interest rate increase in the second half of the year.

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Such hopes are primarily due to the unexpected increase in Australian inflation in the first quarter of this year. The data published earlier this week came out in the green zone, surprising market participants. In annual terms, the consumer price index increased for three quarters - from the second quarter of 2019, approaching the target two-percent mark (1.8%) at the end of 2019. Taking into account recent events, most experts expected a decline in inflation at the beginning of this year due to a significant decrease in consumer activity. But contrary to all expectations, the CPI crossed the 2 percent mark on an annual basis and reached 2.2%. In quarterly terms, the indicator decreased, but again, it turned out to be better than forecasts (a decline to 0.3% with a forecast of 0.1%). Moreover, core inflation showed positive dynamics, rising both in monthly and annual terms. By the way, the latest data on the labor market in Australia also came out better than forecasts – instead of an increase in unemployment to 5.4%, the indicator rose to 5.2%; instead of a decline in the number of employed to -30 thousand, the indicator grew to almost 6,000. But there is one caveat: these figures reflect only the first two weeks of March, while strict quarantine was introduced in the country in the second half of the month before last.

Meanwhile, investors were also pleased with the latest data on Australia's foreign trade: in March, the volume of exports of goods increased by 29% on a monthly basis, primarily due to growth in the commodity sector. In particular, iron ore exports to China recovered after a significant decline in the first months of this year.

Therefore, the aussie's growth is primarily due to two factors – first, national macro indicators show a decline that was not as strong as expected (and sometimes show growth), and secondly, China has come out of lockdown, launching its economy. China, as you know, is the largest trading partner of Australia, so this factor has played such an important role for the aussie. In addition, the Australian authorities are also gradually relaxing the quarantine regime, returning to normal life.

All this suggests that next week, members of the RBA could express cautious optimism about the recovery of the national economy in the second half of the year. It is obvious that the regulator will keep the current parameters of monetary policy in the same form, but it will not frighten the market with additional measures. A wait-and-see position will support the aussie, especially against the background of the vulnerability of the US currency.

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Let me remind you that yesterday the Fed unexpectedly (just the day after the April meeting) announced an expansion of the scale of the lending program for small and medium-sized businesses. The program itself was announced three weeks ago, but changes have been made only now - "after receiving feedback from more than two thousand companies and individuals." First, the regulator lowered the minimum amount for loans of certain categories from 1 million to 500 thousand dollars, second, it increased the list of companies that can get loans under this program, and third, it created a new option with an increase in the share of risk from lenders for borrowers with a higher ratio of equity and debt. This unexpected move came as a surprise to dollar bulls, after which the dollar index significantly slumped, reflecting a decline in demand for the greenback across the market.

Thus, the AUD/USD pair retains the potential for further growth. The current decline in prices is explained by negative data from China – the April PMI for the manufacturing sector came out slightly worse than expected (50.8 instead of 51). But, firstly, the indicator remained above the key 50-point level, and secondly – we are talking about April, when the country was just leaving the strict quarantine regime. Therefore, this fundamental factor will have a temporary impact. In the medium-term perspective, you can consider long positions with a growth target of 0.6590 (the upper line of the Bollinger Bands indicator on the daily chart).

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Lagarde's speech to the ECB

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Here's the speech by Christina Lagarde:

"Dear Sir or Madam, the Vice President and I are always happy to welcome you all to today's press conference. We are ready to inform you the results of today's meeting of the Governing Council, in which Mr. Dombrovskis, Executive Vice President of the Commission, took part.

The euro zone is facing an economic crisis. The survey of consumer and business sentiment fell sharply, indicating a sharp decline in economic growth and a serious deterioration in labor market conditions. Given the high uncertainty regarding the final extent of the economic impact, the growth scenarios prepared by the ECB staff suggest that Eurozone GDP may fall by 5-12% this year.

The decisive and targeted political measures that we have taken since the beginning of March have already provided decisive support to the eurozone economy, especially to those sectors that are most vulnerable to the crisis. In particular, we support liquidity conditions, and help maintain the flow of loans to households and firms, especially small and medium enterprises, and in the meantime, we create favorable financing conditions for all sectors and jurisdictions.

In accordance with our mandate, the Governing Council is determined to continue to support households and businesses in the face of current economic turmoil and increased uncertainty in order to ensure medium-term price stability."

The following were decided at a meeting of April 30, 2020:

1. The most basic refinancing operations in the Euro Zone will be lowered to 50 basis points relative to the average interest rate from June 2020 to June 2021.

2. Refinancing operations will be moved aside from May 2020 to September 2021 to support liquidity in the financial system and to maintain the smooth functioning of money markets.

3. We also intend to fully reinvest the main payments on derivatives securities purchased under APP over the entire period of time, up to the date when we begin to raise interest rates of the ECB.

4. The ECB key interest rates will be left unchanged until we see that the inflation forecast is stable and approaches a mark below 2% within our forecast.

The following were the completed details for each item:

"After summing up the results of monetary analysis of monetary analysis, we can say that bringing inflation to 2%, a sufficient degree of monetary adjustment is only necessary in the medium-term.

As for fiscal policy, an ambitious and coordinated fiscal position is crucial given the sharp decline in the eurozone economy.

The Governing Council urges continued active and timely efforts to prepare for and support economic recovery.

In this regard, we welcome the agreement of the European Council on the establishment of a recovery fund designed to address this unprecedented crisis. "

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EUR/USD - take profit!

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EUR/USD - take profit!

Good afternoon traders! Congratulations to those who used our trading idea yesterday for the EUR/USD pair, which was to work out the area of seller's stops at the level of 1.09:

Plan:

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Development:

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The movement passed more than 1000p!

"Price Action" and "Stop Hunting" methods were used for the trading idea.

Good luck!

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

Indicator analysis. Daily review for EUR/USD pair on May 1, 2020

Trend analysis (Fig. 1).

On Friday, the market from the level of 1.0955 (yesterday's closing of candlestick), may continue to rise with the goal of 1.0993 - the upper fractal (presented in blue dashed line). However, breaking up this level is unlikely.

Breaking away from this level down, will lead us to a pullback work down with the goal of 1.0938 – the pullback level of 14.6% (red dotted line). There is a high probability that when this level is broken down, the downward movement will continue with the goal of 1.0916 – the pullback level of 23.6% (red dotted line).

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Fig. 1 (daily chart).

Comprehensive analysis:

- indicator analysis - up;

- Fibonacci levels - up;

- volumes - up;

- candlestick analysis - up;

- trend analysis - up;

- Bollinger Lines - up;

- weekly schedule - up.

General conclusion:

Today, the price will try to continue its upward movement with the goal of 1.0993 - the upper fractal (blue dashed line).

An unlikely scenario: working up with the target of 1.1032 - the upper border of the Bollinger line indicator (purple dashed line) from level 1.0993 - the upper fractal (blue dashed line).

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AUD/NZD - take profit!

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Good afternoon traders! Here is the development of the previous trading idea for the AUD/NZD pair.

Based on the trading idea on April 21, 2020, we arranged sell limits for the AUD/NZD and AUD/CAD pairs.

I suggest closing the grid on AUD/NZD in the general area or under the round level of 1.06, depending on the average price of the set.

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The idea is based on the average pullback within the framework of the grid method used in trading certain cross-rates.

Congratulations to those who used our trading idea!

For the AUD/CAD pair, I suggest holding your positions below the 0.9 level.

Good luck!

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

GBP/USD: plan for the European session on May 1. Bulls will be able to continue the pound's growth only if they consolidate

To open long positions on GBP/USD, you need:

Yesterday, I advised you to open short positions after updating resistance 1.2526 in the morning, and then buy from the 1.2479 level to continue the upward trend in my forecast for the US session. If you look at the 5-minute chart, you can see how the bears fought back from the 1.2526 level, but then a downward correction to the major support of 1.2479 returned buyers to the market, who threw the British pound to the high of 1.2632. This level also resulted in quite good short positions. At the moment, buyers of GBP/USD should break through and consolidate above the resistance of 1.2579, which will lead to a new upward wave in the area of the high of 1.2638, where I recommend taking profits, since it will be quite problematic to break above this range. In case the pound falls in the first half of the day, following the manufacturing activity report in the UK, it is best to consider long positions after a test at 1.2526 by forming a false breakout there, or buy on a rebound from support 1.2479.

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To open short positions on GBP/USD, you need:

The market was clearly not on the sellers' side yesterday, which resulted in an update of the major resistance of 1.2632, where I advised you to sell. At the moment, bears should form a false breakout in the resistance area of 1.2579, after which a larger downward correction could form in the important support area of 1.2526, where I recommend taking profits. However, weaker than forecasted UK manufacturing activity data could bring the British pound to a low of 1.2479, which will mean a reversal of the current upward trend that was formed on April 21. In case of growth above the resistance of 1.2579, it is best to return to short positions on a false breakout from the high of 1.2638, or sell the pound immediately on a rebound from the resistance of 1.2686.

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Signals of indicators:

Moving averages

Trading is conducted above 30 and 50 moving average, which implies a continuation of the upward trend.

Note: The period and prices of moving averages are considered by the author on the hourly chart H1 and differs from the general definition of the classic daily moving averages on the daily chart D1.

Bollinger bands

If the pound declines, support will be provided by the lower border of the indicator at 1.2510. Growth will be limited by the upper level of the indicator at 1.2635.

Description of indicators

  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
  • MACD indicator (Moving Average Convergence / Divergence - moving average convergence / divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
  • Bollinger Bands (Bollinger Bands). Period 20
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EUR/USD: plan for the European session on May 1. Euro grows after ECB meeting. Bulls aim for a breakout of 1.0957

To open long positions on EURUSD, you need:

In my review yesterday, I advised you to open long positions when the pair declines to a major support in the area of 1.0840. If you look at the 5-minute chart, you will see how a false breakout was formed there, after which the euro started to sharply grow. Those who did not have time to buy in the 1.0840 area could easily do so after the breakout and then consolidate above the 1.0885 resistance. At the moment, the task of the bulls is to break through and consolidate above the resistance of 1.0957, which will quickly lead the pair to a new high of 1.0990, with growth above which there could be problems, since it is likely to form a divergence on the MACD indicator. Many European markets will be closed today due to the celebration of May 1, so the volatility may be quite low in the first half of the day. In case the EUR/USD falls since there are no important fundamental data, it is best to return to long positions only on a false breakout in the support area of 1.0922, or buy the euro immediately on a rebound from the low of 1.0890.

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To open short positions on EURUSD you need:

The bears managed to return to the market after an update of major resistance at 1.0965, from which I advised opening short positions in the afternoon. Today, sellers need to regain control over the market. There is a probability of forming a false breakout in the resistance area of 1.0957, and forming a divergence on the MACD indicator in the resistance area of 1.0990, from where you can open short positions immediately on the rebound. An equally important task for the bears is to break through and consolidate below the 1.0922 support. If euro buyers are not active, then bears have a chance to completely regain the current bullish momentum today, so I advise increasing short positions after consolidating below the range of 1.0922 in the hope of pulling down EUR/USD to the lows of 1.0890 and 1.0851 and returning the pair to the side channel from which it left yesterday.

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Signals of indicators:

Moving averages

Trading is conducted above 30 and 50 moving averages, which implies maintaining the bullish momentum.

Note: The period and prices of moving averages are considered by the author on the hourly chart H1 and differs from the general definition of the classic daily moving averages on the daily chart D1.

Bollinger bands

Growth could be limited by the upper level of the indicator in the region of 1.0990. In case the euro falls, the lower border of the indicator will provide support around 1.0875.

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

Technical Analysis of EUR/USD for 01/05/2020:

Technical Market Outlook:

The EUR/USD pair has tested the key short-term resistance located at the level of 1.0951, but the bulls were rejected from this level. Please notice, that this level is very close to the upper parallel channel boundary, so a breakout might be a tricky one. The momentum is still strong and positive, but the market conditions are overbought, so the odds for another dynamic wave up are decreasing. The nearest technical support is seen at the level of 1.0893 and if violated, the sell-off might accelerate towards 1.0809.

Weekly Pivot Points:

WR3 - 1.1057

WR2 - 1.0976

WR1 - 1.0895

Weekly Pivot - 1.0809

WS1 - 1.0731

WS2 - 1.0641

WS3 - 1.0563

Trading Recommendations:

The fear of the coronavirus consequences is very strong among the global investors and it rules on the financial markets. ON the EUR/USD pair the main trend is down, but the reversal is possible when the coronavirus pandemic will be tamed. The key long-term technical support is seen at the level of 1.0336 and the key long-term technical resistance is seen at the level of 1.1540. Only if one of this levels is clearly violated, the main trend might reverse (1.1540) or accelerate (1.0336).

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Technical Analysis of GBP/USD for 01/05/2020:

Technical Market Outlook:

After the GBP/USD pair has broken out of the parallel channel zone and rallied towards the swing high located at 1.2645. The bulls were rejected at this level and then the rate dropped to the support located at 1.2580 and is currently hovering around it. Nevertheless, in order to continue the larger time frame up trend, the bulls must violate the swing high located at 1.2645 otherwise the current move up will be considered as a counter-trend corrective wave that will not last for long. It might be tricky, as there is a clear bearish divergence forming between the price and momentum oscillator already.

Weekly Pivot Points:

WR3 — 1.2379

WR2 — 1.2609

WR1 — 1.2480

Weekly Pivot — 1.2357

WS1 — 1.2228

WS2 — 1.2104

WS3 — 1.1970

Trading Recommendations:

The fear of the coronavirus consequences is very strong among the global investors and it rules on the financial markets. On the GBP/USD pair the main trend is down, but the reversal is possible when the corona virus pandemic will be tamed. The key long-term technical support has been recently violated (1.1983) and the new one is seen at the level of 1.1404. The key long-term technical resistance is seen at the level of 1.3518. Only if one of this levels is clearly violated, the main trend might reverse (1.3518) or accelerate (1.1404).

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Technical Analysis of BTC/USD for 01/05/2020:

Crypto Industry News:

The top venture capital company Andreessen Horowitz creates a second cryptographic asset fund with a total value of USD 515 million, exceeding the initial plan by USD 65 million. As with the first cryptography-oriented a16z fund that raised $ 300 million in 2018, this new venture will reportedly focus on blockchain projects.

The developers expect many new blockchain chains to appear in 2020. This will also apply to Dfinity, a cloud-based project based on this technology, which a16z has already supported through its first cryptographic fund.

As one of the first venture capital companies to enter this area, Andreessen Horowitz has so far invested in various cryptographic projects, including Libra, Maker DAO (MKR) and Coinbase, among others. The company's involvement in the crypto industry is not just limited to investment. In December 2019, a16z announced the creation of a free seven-week cryptography launch school that was expected to start in February 2020. However, there are no updates so far.

Technical Market Outlook:

The BTC/USD has made a trend reversal pattern at the top of rally in form of Shooting Star candlestick pattern. Before the pattern emerged, the bulls have managed to hit the level of $9,381 and then the bearish pressure occurred. The rate dropped to the level of $8,357 and bounced slightly towards $8,700. The nearest support for Bitcoin is seen at the level of $7,934. The market conditions are extremely overbought, so odds for a deeper corrective wave are still high.

Weekly Pivot Points:

WR3 - $9,046

WR2 - $8,348

WR1 - $8,040

Weekly Pivot - $7,352

WS1 - $7,064

WS2 - $6,356

WS3 - $6,047

Trading Recommendations:

The fear of the coronavirus consequences is very strong among the global investors and it rules on the financial markets. So far the global investors are not so keen to invest in Bitcoin and treat BTC as a digital gold. The larger time frame trend remains down and as long as the level of $10,791 is not violated, all rallies will be treated as a counter-trend corrective moves. This is why the short positions are now more preferred.

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Technical Analysis of ETH/USD for 01/05/2020:

Crypto Industry News:

The Swiss Association of Capital Markets and Technology (CMTA) has published a common standard for the storage and management of digital assets. Announced on April 30 by CMTA The Digital Asset Storage Standard aims to sort out the differences between cryptocurrency storage and traditional assets, and to set basic security and operational requirements for industry entities.

CMTA is an independent association, founded in Geneva in 2018. It aims to promote implemented technologies such as blockchain and digital assets on financial markets. They pointed out that the storage of digital resources is significantly different from traditional resources, which usually use centralized systems and do not rely on cryptographic mechanisms. In the case of crypto, investors need high confidence that the decentralized storage infrastructure is well developed and properly secured against loss, theft or hacking.

CMTA also outlined some of the benefits it sees in using DLT in financial markets. In particular, the association indicates the advantages of technology for small and medium-sized enterprises, for the simplification and democratization of financial mechanisms.

Technical Market Outlook:

The ETH/USD has made a trend reversal pattern at the top of rally in form of Bearish Engulfing candlestick pattern. Before the pattern emerged, the bulls have managed to hit the level of $225.54 and then the bearish pressure occurred. The rate dropped to the level of $201.51 and it is hovering above the short-term trend line support so far. The nearest support for ETH is seen at the levels of $198.72, $193.78 and $188.86. The market conditions are extremley overbought, so odds for a deeper corrective wave are still high.

Weekly Pivot Points:

WR3 - $243.80

WR2 - $220.39

WR1 - $211.16

Weekly Pivot - $187.55

WS1 - $172.98

WS2 - $155.34

WS3 - $144.09

Trading Recommendations:

The fear of the coronavirus consequences is very strong among the global investors and it rules on the financial markets. So far the global investors are not so keen to invest in cryptocurrency, because they are being perceived as risky assets. The larger time frame trend on Ethereum remains down and as long as the level of $214.67 is not violated, all rallies will be treated as a counter-trend corrective moves. This is why the short positions are now more preferred.

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

Control zones for AUDUSD on 05/01/20

The probability of forming a downward model and returning to the limits of the monthly CZ in April is at 90%. This allows you to search for entry points to sell from any corrective levels. The main target of the fall is the 1.6322 level. From the current levels, this will make it possible for you to take 130 points of profit. To enter the sale, it is better to obtain more favorable prices.

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There is a breakthrough of the WCZ 1/2 0.6481-0.6472. This could be the starting point for next week's movement.

The probability of forming an alternative growth model is 25%, which does not make it profitable to purchase from current levels. It is very risky to consider long positions until the pair returns to the 1.6322 level. The option of forming an accumulation zone will develop if today's trading closes above the WCZ 1/2.

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Daily CZ - daily control zone. The area formed by important data from the futures market, which changes several times a year.

Weekly CZ - weekly control zone. The zone formed by important marks of the futures market, which changes several times a year.

Monthly CZ - monthly control zone. The zone, which is a reflection of the average volatility over the past year.

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Control zones for EURUSD on 05/01/20

Yesterday's trade closed above the weekly control zone of 1.0927-1.0909, which suggests a high probability of continued growth. The next target of the bullish momentum is the WCZ 1/2 of 1.1027-1.1018. The probability of reaching this zone is 75%, so any downward movement must be used to find favorable prices for buying.

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The first support will be WCZ 1/4. If falling to this zone will result in forming a buy pattern, then you should not expect a deeper decline.

An option of a deep correction will develop if today's trading closes below the WCZ 1/4. This will allow you to buy the tool after testing WCZ 1/2 1.0822-1.0873. This model has a very favorable risk to profit ratio, which makes it a priority.

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Daily CZ - daily control zone. The area formed by important data from the futures market, which changes several times a year.

Weekly CZ - weekly control zone. The zone formed by important marks of the futures market, which changes several times a year.

Monthly CZ - monthly control zone. The zone, which is a reflection of the average volatility over the past year.

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Forecast for EUR/USD on May 1, 2020

EUR/USD

The euro calmly endured the ECB meeting on Thursday and even slightly fell on the comments of Christine Lagarde about the impending "unprecedented" economic downturn, but the euro faced a powerful speculative growth an hour before the London stock exchange closed, which, according to agencies, rebalanced investment portfolios in the end of the month and before the May Labour Day weekend in some European countries, including Germany and France.

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The price worked out the resistance of the price channel line and the MACD line, now in thought. Overcoming yesterday's high will allow the euro to climb to the target level of 1.1026 (low of August 1, 2019), then growth to the peak of February 2020 is possible at the 1.1094 level.

But the price could return to the MACD line and consolidate below it, then it is worth waiting for the euro to fall below the signal level of 1.0833 to safely open a sale with the goal of 1.0600.

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The price is completely in an upward position on the four-hour chart, which in turn slows down the possibility of the price recovering in a falling trend. The current situation is completely dualistic, we are waiting for clarification regarding the situation next week.

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Forecast for GBP/USD on May 1, 2020

GBP/USD

The pound rose on Thursday, following the euro, testing the Fibonacci level of 110.0% on the daily chart. Now the prices are retreating from this level.

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The price consolidated above the MACD indicator line and formally tends to the new target of 1.2725 - to the Fibonacci level of 100.0%. But the Marlin oscillator marked all the pound's previous weekly growth with a moderate increase, showing reluctance to develop a growing vector. For the price, it is enough to overcome yesterday's high and eventually retreat again so that a reversal divergence forms on Marlin. The ongoing growth is fraught with danger. Another such danger (apart from divergence) can be a downward movement from current levels, it is enough for the price to gain a foothold at the Fibonacci level of 138.2% (1.2422) in order to return the technical picture to the downward with the targets of 1.2235 and 1.1935. Obviously, you should wait until the situation is clear.

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The MACD line coincides with the Fibonacci level of 138.2% on the four-hour chart. The formed support at 1.2422 is gaining importance - it can restore the pound's downward trend when the price overcomes this. The situation is likely to clear up next week..

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Forecast for AUD/USD on May 1, 2020

AUD/USD

The Australian dollar, after overcoming the price channel line on Wednesday, returned to the area below it on Thursday and today, it opened under this price channel line. Thus, the divergence on the Marlin oscillator worked out, the situation continued to develop according to the main scenario.

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The pound is aiming for the underlying price channel line at 0.6373, then the support of the MACD line at 0.6270, and the third goal is the linear support at 0.6155.

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The price came close to the MACD line on the four-hour chart. Overcoming the support (signal level of 0.6458) opens up a way to 0.6373. Overcoming 0.6373 opens the target of 0.6270. The Marlin oscillator is already in the negative zone.

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Forecast for USD/JPY on May 1, 2020

USD/JPY

The dollar sharply strengthened against the yen on Thursday due to a general surge in activity before the European trading session ended. The price returned to the uncertain range between the two trend lines on the daily chart. But the downward trend has not been violated - the price is below the red balance indicator line, the Marlin oscillator in the zone that bears are managing.

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The upper boundary of the wandering yen is the MACD line (107.90). A return to the falling scenario will occur after the price goes below April 29 low (106.37).

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The price develops between the balance and MACD indicator lines on the four-hour chart, the Marlin oscillator moves into the growth zone, which, if it does not create a technical condition for the price to rise, delays its wandering over time. Obviously, after a surge in activity yesterday, and it is a public holiday today in Europe, the price will remain in the range until the beginning of next week.

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EUR/USD. Saturated Thursday: conflicting data, gloomy ECB and surprise from the Fed

Again, it depends on the angle at which you look at the published data. We believe that it could have been much worse, so we consider it relatively optimistic, or at least not a failure.

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The main macroeconomic indicators of the eurozone were published in the morning - data on inflation growth, GDP and unemployment. The key EU countries, in particular Germany, Spain and Italy, also announced their macro-indicators. To the dismay of the EUR/USD bulls, the published releases did not support the euro. However, some indicators came out surprisingly better than predicted, not making it possible for the bears to develop a downward movement.

Let's start with the bad news. First of all, German indicators disappointed - the unemployment rate jumped to 5.8% (with a forecast of growth of 5.1%), and the number of unemployed rose to 373,000 (for comparison: this indicator ranged from -10 to +10 on average thousand). French and Spanish indicators were disappointing - France's GDP fell in the first quarter by 5.8% (quarterly) and 5.4% (year on year). The level of consumer spending by the French broke a historical record, plunging to the level of -17.9% (experts expected a decrease to -5.7%). Spain's economy also slowed down to -5.2% (q/q) and -4.1% (y/y). Spanish inflation, which likewise ended up in the red zone, was also disappointing. However, the eurozone consumer price index unexpectedly entered the green zone, not justifying the pessimistic forecasts of most analysts. Thus, the general index fell to 0.4% (with a forecast of decline to 0.1%), and the core inflation index - to 0.9% (with a forecast of decline to 0.7%). Italian inflation was also encouraging - the indicators were better than expected, although in annual terms the CPI dropped to zero. Eurozone GDP growth data for the first quarter turned out to be slightly worse than forecasts. When forecasting a decline to -3.7% q/q and -3.1% y/y, the indicators reached the levels of -3.8% q/q and -3.3% y/y.

Such contradictory results could not help either the bears or the bulls, so the pair could not leave the eighth figure area - traders decided to wait for the outcome of the ECB April meeting. However, the results of the meeting also failed to move the situation off the ground: the European regulator expectedly left the parameters of monetary policy unchanged, and the text of the accompanying statement did not differ much from the March one. There is one innovation: the ECB has launched a new long-term lending program for eurozone banks and relaxed TLTRO conditions (lowering the interest rate on long-term lending operations of TLTRO III), warning of its readiness to increase the scale of the pandemic emergency purchase program announced in March (by currently - 750 billion euros.). However, similar intentions were previously voiced by representatives of the ECB, so traders only formally reacted to this news, by plunging to the 1.0850 level.

During her press conference, ECB President Christine Lagarde put additional pressure on the European currency. Her rhetoric was similar to that of Fed Chairman Jerome Powell, but it was not about the American, but about the European economy. Lagarde predicted the eurozone economy's "unprecedented decline" due to coronavirus. At the same time, she repeated her forecast, which was voiced at the last summit of the leaders of the EU countries - according to preliminary estimates of central bank economists, eurozone GDP could fall by 5-12% this year. During the summit, she slightly exaggerated this forecast, indicating a possible decrease of 15%. Lagarde clarified that the depth of the recession will depend on the duration of the lockdowns that operate in the eurozone countries.

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Thus, the results of the April meeting of the ECB and the subsequent rhetoric of Lagarde were not in favor of the European currency, and so the pair updated the daily low, falling to 1.0833. But subsequent events destroyed bearish plans - the US session could not do without unpleasant surprises for EUR/USD sellers.

Firstly, the most favorite inflation indicator of the Federal Reserve - the RFE - showed rather weak growth, thereby reinforcing concerns about the growth of US inflation in general. Secondly, the indicator of the level of expenditures of the population turned out to be much lower than the forecasted values - it slumped to -7.5% (long-term anti-record) with a forecast of decline to -4.8%. The Chicago PMI business activity index also disappointed - it similarly updated the anti-record, finding itself at 35 points. In addition, labor market data again appeared in the red zone - the number of applications for unemployment benefits rose over the past week to 3.8 million (while experts expected a continuation of the downward trend).

The dollar was under pressure following the above releases, and eventually it collapsed throughout the market at the end of the trading day - but not because of macroeconomic reports. The fact is that the Fed unexpectedly (the day after the April meeting) announced the expansion of the lending program for small and medium-sized businesses. The program itself was announced three weeks ago, but changes have been made to it only now - "after receiving feedback from more than two thousand companies and individuals." Firstly, the regulator reduced the minimum amount for loans of certain categories from 1 million to 500 thousand dollars, secondly, increased the list of companies that can receive loans under this program, and thirdly, created a new option with an increase in the share of risk from lenders for borrowers with a higher ratio of own and borrowed funds.

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The effect of surprise (and the fact of expanding the program itself) played against the US currency - the greenback flew a stone down the entire market, and the dollar index tested the 98th figure (although it was already on the boundaries of the hundredth figure in the morning). The EUR/USD pair jumped to the resistance level of 1.0970 (the upper line of the Bollinger Bands indicator on the daily chart). As a rule, after such impulsive jumps, correctional pullbacks will follow. In this case, it is necessary to follow the 1.0930 mark (Kijun-sen line on the same timeframe) - if buyers can keep the price above this target, the bulls will test 1.0970 again with an eye on the 10th figure. That is, if the price stays above 1.0930 on Friday, we can consider long positions to the lower and upper boundaries of the Kumo cloud, which correspond to the marks of 1.1000 and 1.1060. If the pair returns to 1.0850, the bullish scenario will lose its relevance.

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Overview of the GBP/USD pair. May 1. Donald Trump's political ratings are falling due to a series of mistakes, ambiguous

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - downward.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - up.

CCI: 244.1502

The British pound continues its strong upward movement on May 1 and has worked out the Murray level of "7/8". In the article on the EUR / USD pair, we have already said that there were no good reasons for the strong fall of the US dollar yesterday. Two far from the strongest reports, one of which was not a failure, and the second did not cause a strong reaction of traders ever, could not provoke a strong growth of the pound/dollar pair. However, it doesn't matter now. It is important that a correction may start tomorrow, which would be the logical end of the week. If the strong growth of the British currency continues tomorrow, then it will be appropriate to talk about a new wave of panic in the currency market.

Since the flow of news and economic data from the UK is still reduced to zero, and the pound/dollar pair continues to move along the same trajectory that it understands, we suggest focusing on the urgent problems of the US. Recently, attention has shifted from the "coronavirus", which continues to set records for morbidity and mortality in the United States, to future presidential elections. According to the latest information, the political ratings of Joe Biden, a Democrat and the main opponent of Donald Trump in the upcoming elections, are much higher. And Trump himself is more and more often criticized for frankly absurd comments on the topic of "coronavirus", which change dramatically every week, as well as for the failure of proper preparation for the epidemic and the fight against the new virus. As soon as Trump realized that he could be extreme in this situation since he is the head of the state with the highest number of deaths and diseases, he immediately began to look for the culprits. At the moment, this list includes the WHO, China, and the doctors who introduced him at the very beginning of the epidemic. Also, Trump said the following in response to a direct question about Biden's political ratings: "I don't believe in polls. I believe that American citizens are smart. I don't think they'll put an incompetent person in here. I believe that he (Joe Biden) has been incompetent for 30 years. Everything he ever did was bad. His foreign policy was a disaster." As always, no facts or evidence or grounds, just Trump's personal opinion. We also previously reported that the cancellation of all rallies in support of Donald Trump in the many American states clearly does not benefit the political ratings of the current President. This is also understood by Trump himself, who, despite the raging epidemic, is going to visit Arizona and Ohio next week. Also, the leader of the United States expresses the hope that his meetings will continue to be for 25 thousand people, and "people will not sit at a distance of six chairs from each other." It's scary to even imagine the scale of the pandemic in the United States if Trump starts riding with rallies across the country.

At the same time, political analysts believe that Donald Trump has also significantly damaged his political authority due to skirmishes with the governors of many states. Especially those that are most affected by the "coronavirus". Especially those that are controlled by Democrats. Various opinion polls show the loss of Trump's leadership in four key states - Florida, Pennsylvania, Michigan, and Wisconsin, where previously it was Trump who won (in 2016). Now in these states, Joe Biden leads. Most importantly, there is a change in preferences among voters aged 55 and over across the country. And here there are two important factors. First, it is this age group that is most susceptible to the COVID-2019 virus. Second, this age group is the most active in elections. Thus, older Americans are simply dissatisfied with the White House's fight against the "Chinese infection" and its desire, instead of extending quarantine measures to open the country's economic borders, which threatens new outbreaks of the pandemic and new deaths, primarily among the elderly. More and more Americans believe that the Democratic candidate could have handled the pandemic better and generally thinks more about people.

It is also noted that back in March, Donald Trump's political ratings were much higher. So high that the leader of the United States could feel relatively calm before the upcoming elections. However, in the future, a series of mistakes, omissions, conflicts, contradictory statements, the rush to open economic borders, possibly paid rallies in support of "resuming normal life" (in which an extremely small number of people participated) led to the fact that the majority of American voters already seriously doubt the feasibility of Trump's re-election. As practice shows, when Trump is fighting in the international arena (military conflicts in the Middle East, trade wars), Americans support him. But when it comes to their own health and life/death, very few are ready to stand for Trump's mountain.

On the last trading day of the week in the UK, the publication of the index of business activity in the manufacturing sector for April is scheduled, which is likely to decrease from 47.8 to 36.4 points and is unlikely to have any impact on the movement of the pound/dollar currency pair. In the United States, business activity indices are also scheduled to be published today. The ISM index, which is considered more significant than Markit, will attract the most attention. However, the ISM index in the manufacturing sector is likely to decline as well as Markit. In general, Friday will be quite boring in terms of macroeconomic information. We are waiting for traders to calm down after a fairly active Thursday and a drop in volatility. Moreover, the reasons for yesterday's growth of the euro and the pound remain open. If there are fewer questions about the euro, then why the pound grew in the second half of the day is a serious question. We believe that this strengthening of the British currency was somewhat unjustified, which means that it can be played back in the opposite direction on the last trading day of the week. Moreover, the pound/dollar pair yesterday perfectly worked out the previous local maximum of 1.2647 and failed to go above it. Therefore, we can obtain the similarity of the pattern "double top", followed by a drop in prices.

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The average volatility of the GBP/USD pair has increased again due to yesterday and is now 120 points. For the pound, this is not much, the main thing is not to start a new trend of increasing volatility, which may mean a new panic in the market. On Friday, May 1, we expect movement within the channel, limited by the levels of 1.2473 and 1.2713. Turning the Heiken Ashi indicator down will indicate the beginning of a corrective movement.

Nearest support levels:

S1 – 1.2573

S2 – 1.2512

S3 – 1.2451

Nearest resistance levels:

R1 – 1.2634

R2 – 1.2695

R3 – 1.2756

Trading recommendations:

The GBP/USD pair continues its strong upward movement on the 4-hour timeframe. Thus, traders are advised to stay in buying the pound with targets of 1.2634 and 1.2695, until the Heiken Ashi indicator turns down. It is recommended to sell British currency no earlier than fixing the price below the moving average line with the first target Murray level of "3/8"-1.2390.

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

Overview of the EUR/USD pair. May 1. ECB President Christine Lagarde: the EU economy will decline by 15% in the second quarter

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - sideways.

Lower linear regression channel: direction - sideways.

Moving average (20; smoothed) - sideways.

CCI: 246.3812

On Thursday, April 30, the EUR/USD currency pair perked up. Trading was very boring for a few weeks, however, both the euro/dollar and the pound/dollar synchronously soared up yesterday. Thus, the fall in the US currency can not be linked to the Fed meeting, which was the day before, to the publication of weak US GDP, which was also the day before, as well as the meeting of the European Central Bank, its results and the publication of data on unemployment, inflation and GDP in the Eurozone, because this news is not related to the British pound. There are only two reports that could hypothetically cause the dollar to fall. These are applications for benefits, which this time was not as failed as 5 weeks in a row before. It could not have caused such a strong fall in the US currency. There remains a report on the personal income and spending of the American population, which fell record-breaking. Judge for yourself, as far as possible, so that the report, to which there is no reaction even in normal, quiet times, could provoke a total fall in the US currency when all the other much more important data were ignored.

At the end of the trading week in the European Union, no more important events and reports are planned. This week, however, there were plenty of them. The day before, reports on GDP for the first quarter, unemployment and inflation were published. And also yesterday, the results of the ECB meeting were summed up, which in the last article we covered very superficially due to the fact that at the time of writing, the press conference with Christine Lagarde had not yet ended. However, all the key decisions of the ECB are already known and the market has taken them into account. Accepted and ignored. The European currency during the penultimate trading day of the week simply did not know what to do. Only at the end of the day, the markets seemed to break loose and began to get rid of the US currency. And this is hardly related to the results of the meeting. However, this event needs to be analyzed in detail.

First and most importantly, the ECB left key rates unchanged. However, none of the market participants expected that the regulator would change them. Also in the final statement was the already well-known wording that "rates will remain at ultra-low values until inflation returns to the target levels of the Central Bank." Given that these target levels are about 2%, and inflation in the European Union continues to slow down and is unlikely to accelerate during the crisis, the European regulator will raise rates for a very long time. And what kind of increase can we talk about if the EU economy needs help in the amount of several trillions of euro currency? And this is at a time when the epidemic has not ended, that is, it will continue to have a negative impact on the economy. The European Central Bank announced the launch of a new lending program for banks, lowered the rate for the target long-term lending program TLTRO III and announced that it was ready to increase the scale of the Pandemic Emergency Purchase Program, which currently stands at 750 billion euros. Thus, the European Central Bank is ready to resort to any monetary measures to save the economy, and these measures are really needed. Also in May, a new program for short-term lending to banks in the context of the epidemic will be launched, which will be designed to provide the necessary levels of liquidity and promote the normal functioning of markets. The Central Bank of the Eurozone, in an accompanying statement, also announced its readiness to continue buying bonds until the crisis ends and, at least, until the end of this year.

Christine Lagarde during a press conference of the European Central Bank said that the fall of the European economy may be unprecedented. According to ECB forecasts, EU GDP in 2020 will decrease by 5-12%, and the scale of economic contraction will depend on the timing of quarantines in different EU countries, which ensure the minimum spread of "coronavirus" infection. No one knows whether there will be new waves of pandemics or how long humanity will have to fight it. Thus, these forecasts are still optimistic, implying that the easing of quarantine measures will not lead to new outbreaks and the EU economy will begin to recover in the third quarter. As for the second quarter, according to Christine Lagarde, the EU economy will decline by 15%(recall that the United States is expected to contract in the second quarter by 15-25%). The European Central Bank expects that the economy will not start on the path of a confident and stable recovery until 2021. The Pandemic Emergency Purchase program may be extended to 2021, if necessary.

Well, in fact, all the efforts of the European Central Bank are reduced to buying government bonds of European countries, which in return receive cash, which the regulator simply prints or creates in bank accounts. The ECB still states that the main goal is economic growth, which will be realized through stable inflation. However, the methods of banal printing money and distributing it through debt mechanisms to EU countries are unlikely to lead the EU to grow. On the other hand, there is no question of any growth now. This is about saving the economy.

Meanwhile, Donald Trump made a new statement on the topic of "coronavirus", which again makes you think about what the American President meant. "We need to wait for the virus to go away. He will leave, and we will return to the old life," Trump said. When asked: "Why do you think that without a vaccine, the virus will go away?", Trump replied: "It will leave us, self-destruct." Recall that just a few days ago, Donald Trump advised doctors to study the possibility of delivering strong rays of light and disinfectants inside the body of patients with "coronavirus", which "can kill the virus in one minute". In addition, the US leader said that the Americans will have to wait, perhaps for several years, until the virus goes away.

At the same time, Donald Trump said that it is extremely unprofitable for China to win the presidential election in November. And in his opinion, Beijing will do everything to prevent him from winning the election and support Joe Biden. However, this information is not new and began to spread even at the time of the declaration of a trade war with China. On the other hand, what did Trump want? For China to idolize him and maybe finance his election campaigns? The American President himself has made a huge number of enemies in the three years that he has been at the helm of the country. Perhaps never in the history of the United States has a President had so many detractors, both inside and outside the country. And of course, Trump did not fail to once again accuse China of spreading the COVID-2019 epidemic around the world. Asked what options the White House is considering as compensation for the consequences of the epidemic, Trump replied: "I can do a lot." It really can. For example, cancel the trade agreement with Beijing, impose new duties on it, demand compensation, and impose various types of sanctions. But will there be enough time until November 2020 for the American President to further damage relations with China?

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The volatility of the euro/dollar currency pair as of May 1 is 88 points. Volatility, therefore, remains average in strength, close to high, and there is still no reason to expect a new wave of panic. Today, we expect the pair's quotes to move between the levels of 1.0862 and 1.1038. Turning the Heiken Ashi indicator down may signal the beginning of a downward correction.

Nearest support levels:

S1 – 1.0864

S2 – 1.0742

S3 – 1.0620

Nearest resistance levels:

R1 – 1.0986

R2 – 1.1108

R3 – 1.1230

Trading recommendations:

The EUR/USD pair overcame the moving average and continues its upward movement. Thus, traders are recommended to stay in the purchase of the euro currency with the goals of 1.0986 and 1.1038 levels until the Heiken Ashi indicator turns down. It is recommended to consider selling the euro/dollar pair not before fixing the price below the moving average line with the goal of 1.0742.

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