EUR/USD. The Constitutional Court of Germany dealt a blow to the ECB’s efforts to save lots of the ecu economy last week. It decided that the ecu regulator had exceeded its authority regarding the quantitative easing (QE) program, and thus its decisions weren’t binding on Germany. This news immediately weakened the EUR/USD position. If you increase this the shortage of compromise among EU governments over fiscal stimulus, the risks of Eurozone fragmentation are growing a day .
However, things aren’t better on the American continent. Publications of recent data have shown that things within the US market is even worse than expected. 33.5 million Americans have applied for primary unemployment benefits since late March, non-farm employment in April alone fell by 22.5 million jobs, and unemployment reached 14.7% (4.4% in March). Under such circumstances, some experts don’t rule out cutting the Fed’s rate of interest to negative values.
However, it seems that the market is tired and reluctant to reply to individual figures and events, listening only to the resumption of commercial activity and therefore the removal of restrictive quarantine measures in several countries. Of course, the EUR/USD quotes fluctuate up and down, but the volatility that we observed in late February and March isn’t even present. The pair has been occupation the 1.0750-1.1000 channel for the fifth week during a row since early April, and, as most (65%) experts predicted, even the expectations of a replacement round of the US-Chinese trade war couldn’t push it beyond these borders;
GBP/USD. The forecasts of both experts and indicators for this pair had a neutral gray hue last week. a 3rd of them voted for the expansion of the pair, a 3rd – for the autumn , and a 3rd – for the side trend. The Bank of England meeting on May 7 didn’t add clarity, at which it had been decided to stay the most parameters of the monetary policy unchanged – the rate of interest at 0.1% and therefore the quantitative easing program at £ 645 billion. Calls by two members of the Bank’s management to extend the program by £100 billion never found support from their other seven colleagues.
In such an implicit situation, the pound has been occupation the channel 1.2200-1.2645 for the sixth week, and therefore the range of fluctuations narrowed to the range 1.2265-1.2500 last week, within which, at the extent of 1.2405, the pair ended the trading session;
USD/JPY. 75% of the oscillators and 100% of the trend indicators on D1 predicted last week the continuation of the downward trend that began on Annunciation and therefore the consolidation of the pair below the key level of 107.00. generally , the events developed during this scenario.
Recall that on the primary day of May, the pair made another plan to break the support of 107.00, ending the trading session slightly below it — at 106.85. Then the downtrend continued, and on Wednesday May 6, the pair groped for the local bottom at 106.00. This was followed by a reversal, and therefore the pair returned to the values of the start of the week, ending the five-day period at the extent of 106.70;
cryptocurrencies. The halving within the Bitcoin network is getting closer and closer. When this forecast is written, it’s but four days away. And once you read it, the halving may have already got taken place.
The questions that traders and investors ask us indicate that not all of them understand the meaning of this event. Therefore, it requires clarification.
So, Bitcoin is about up to mine just 21 million coins. Thus, unlike Central banks, which may print an infinite amount of their own currency, the quantity of BTC is strictly limited, which determines its value, making this cryptocurrency appear as if gold.
Halving is that the process of reducing the reward for mining a block by half. There have already been two such decreases within the lifetime of Bitcoin – in 2012 and 2016. And if at the primary stage miners could get 50 BTC for every block within the distributed registry of crypto coins, this figure are going to be only 6.25 BTC soon. this could prevent the inflation of the most cryptocurrency and confirm that each one 21 million bitcoins are completely mined only by 2140
It is important that halving doesn’t occur on a selected date, but at the instant when subsequent 210,000 blocks are mined. The upcoming halving will occur at block 630,000 and, consistent with calculations, this could happen on May 12.
In the run-up to the present event, the most cryptocurrency showed a weekly growth of just about 14%, rising at one point even above the landmark mark of $10,000. the entire market capitalisation of the crypto market has reached $270 billion, of which just about 70% is accounted for by BTC. The Crypto Fear & Greed Index rose in fortnight from 20 to 55, which consistent with the creators of the index corresponds to the prevailing greed within the market when opening short position is dangerous.
Unlike the benchmark cryptocurrency, the most altcoins either showed zero gain or are within the red zone. Ethereum (ETH/USD), Ripple (XRP/USD and Litecoin (LTC/USD) on Friday evening, May 8, are almost where they were seven days ago, which suggests that investors are now so hooked in to Bitcoin that they only don’t care about the remainder of the coins.
As for the forecast for the approaching week, summarizing the views of variety of experts, also as forecasts made on the idea of a spread of methods of technical and graphical analysis, we will say the following:
EUR/USD. The US administration is actively sharpening its teeth, looking towards the center Kingdom. Donald Trump gave the command to watch Beijing’s commitments to extend American exports. At an equivalent time, hints are constantly being heard from the US president that China is that the primary source of all the issues related to the COVID-19 pandemic. this enables us to expect that the new anti-Chinese customs rates aren’t faraway .
Europe, on the opposite measure, is trying to form sense of the choice of the German Constitutional Court, which may cause the issues of the ecu economy to grow sort of a snowball. Leading banks like Societe Generale and Citi are talking a few possible split within the Eurozone if the ECB ignores the choice of the German Constitutional Court and thus challenges the German government. Forecasts show that even within the absence of extraordinary events, the Eurozone GDP decline in 2020 could reach 7.7%.
All this fuels the expansion of anti-risk sentiment, as a results of which investors again begin to seem at the dollar as a secure haven currency. If the ECB is bound hand and foot in its actions to stimulate the ecu economy, the EUR/USD pair, consistent with BofA Merill Lynch forecasts, could fall to 1.0200 by the top of the year.
For subsequent week, the experts’ votes are distributed as follows: 35% believe that the pair will still hold within 1.0750-1.1000, 50% expect the dollar to strengthen and break through the lower border of this corridor, and therefore the remaining 15% address the North.
The indicators have a rather different picture. On H4, 60% of trend indicators and 70% of oscillators are colored green, and on D1, red still prevails, during which 60% of oscillators and 90% of trend indicators are colored.
Support levels are 1.0750 and 1.0650, resistance levels are 1.1000, 1.1065, 1.1100 and 1.1150;
GBP/USD. The pound remains struggling . The Brexit-related problems are multiplied by the coronavirus pandemic. consistent with the Bank of England, UK GDP within the second quarter of 2020 “will be almost 30% lower” than at the top of 2019. Despite this, the regulator didn’t increase the quantity of the help program for British economy, although, at the present rate of bond buying, it’ll exhaust current limits by the top of July. What happens next? It’s not clear yet.
40% of analysts supported by graphical analysis on D1 and indicators on both time frames (H4 and D1) expect the pair to continue the sideways trend in channel 1.2265-1.2500. Another 40% of experts are expecting the breakout of the lower border of the channel and therefore the pair’s decline to the zone of 1.1000-1.2165, and only 20% believe that it’ll go up and reach the peak of 1.2640. subsequent goal of the bulls is 1.2725, after taking which the pair will attempt to rise to the extent of 1.2865-1.3025;
USD/JPY. The v-shaped movement of the pair last week divided experts in half — 50%, supported by indicators on D1, favored bears, and therefore the other 50%, supported by indicators on H4, preferred bulls. At an equivalent time, the latter believe that the reversal of May 06 is nothing but the start of a replacement mid-term uptrend. And if the extent of tension between the US and China doesn’t rise, the pair are going to be ready to rise to 109.00 then to 112.00.
Nearest support levels are 106.20, 106.00 and 105.00. Resistance levels — 107.00, 107.45 and 108.00;
cryptocurrencies. it’s ungrateful to form any predictions in anticipation of such a crucial event as halving. we’ve repeatedly talked about the predictions of various crypto gurus expecting Bitcoin to rise to $50,000, to $100,000, and up to $250,000. But, of course, there are those that hold the other view. So, for instance , financial and cryptocurrency analyst Joseph Young expects a small pullback after halving, then a series of medium-term and long-term growth periods, followed by falling quotes or flat.
Another well-known analyst and trader, Ton Vays, believes that the BTC/USD pair is unlikely to rise seriously in price. “We’re likely to be stuck between $6,000 and $10,000. then it’ll be until the top of the year, ” he said.
As for forecasts until the top of May, their spread is extremely high – from the lows of March 2020 around $4,000 to the highs of June 2019 at the extent of $14,000. So far, 65% of experts have sided with the bulls, and 35% have sided with the bears. we’ll determine who of them is true within the near future. It won’t be long now.