Daily F.X. Analysis, April 22 – U.K. Inflation Reports in Focus!
By Eaglefx On April 22, 2020 in Daily Market Analysis
On Tuesday, the U.S. dollar surged versus a basket of major currencies as traders explored the safety of the world's most liquid currency as a fall in oil prices drained desire for risky assets. The U.S. crude oil traded into the negative zone for the first time in history on Monday, as a dramatic drop in global oil usage due to the coronavirus pandemic constitutes a supply excess and a deficiency of storage capacity. Today, the focus will remain on the UK CPI reports, let's brace for it.
Economic Calendar
BTC/USD - Daily Analysis
The Bitcoin traded with a slight bullish bias at 6,911 area after completing the Fibonacci retracement level around 6,788 level. It seems like the U.S. citizens are using a portion of their $2,000 stimulus plan in Bitcoin and other cryptocurrencies.
On Monday and Tuesday, the BTC/USD price slips from the previous week's high of $7,314, to trade at $6,750. However, the BTC/USD price grew slightly on Wednesday during the Asian session.
The BTC/USD is exhibiting indications of an upside revision from the $6,761 low versus the greenback. A few major obstacles are operating around the $6,955 and $7,030 trading levels. There is a major bearish trend line building with resistance at $7,030 on the hourly timeframe of the BTC/USD. With this, the BTC/USD pair could extend trading lower towards a support area of $6,550, where the buyers are likely to emerge.
BTC/USD - Daily Technical Levels
Support Resistance
6,798 6,968
6,700 7,040
6,530 7,210
Pivot Point 6,870
BTC/USD – Daily Forecast
On Wednesday, the Bitcoin has completed 61.8% Fibonacci retracement at 6,790 level. Bitcoin seems to recover a bit as it's trading around 6,911 area after having violated the immediate resistance level of 6,870 level. At the moment, the BTC/USD pair may find support at 6,700 level as it's been extended by the upward trendline and 61.8% Fibonacci level on the 4-hour timeframe. Violation of this level can open further room for selling until 6,577 area while resistance holds around 6,920 and 7,210. Bearish bias seems dominant below the 6,920 level today.
EUR/USD – ZEW Economic Sentiment Surprises
The EUR/USD currency pair looking flat and trading between the indecisive trading range around 1.0850 mainly because the agreement between the Eurozone member nations about debt mutualization still not happened ahead of the Thursday's European Union leaders' virtual-summit.
The upbeat German Zew Expectations survey data failed to cheer the currency pair as the investors are still cautious due to intensifying coronavirus fears. The EUR/USD is trading at 1.0848 and consolidates in the range between the 1.0844 - 1.0864.
At the data front, the German Zew Expectations survey rose from 28.2 in April from March's -49.5 figures to its highest level in five-years. Whereas the impressive wave is a result of investor confidence that the economy will start to turn around in the second half because the country slowly eases restrictions.
At the same time, analysts are also worried about the high ZEW reading as the economy is still unstable, and the recovery sentiment in the European nations is not clear while there are notable debt, deflation, and political risks to be navigated.
Moreover, the opponent's actions about the coronabonds and fiscal integration still on the peak from the fiscally conservative nation despite the strong calls from Spain, France, and Italy. However, Europe is still not ready to deepen fiscal integration. The lack of comprehensive economic support could suffer the shared currency in further losses.
EUR/USD - Daily Technical Levels
Support Resistance
1.0823 1.0887
1.0788 1.0916
1.0724 1.098
Pivot Point 1.0852
EUR/USD – Daily Forecast
The EUR/USD continues to trade sideways, within a symmetric triangle pattern range of 1.0900 - 1.0800. The EUR/USD continues to trade at 1.8611, holding below the strong resistance level of 1.0885. On the upside, the next resistance stays around 1.0859 an 1.0930.
On the other hand, the EUR/USD has strong odds of showing more buying above 1.0859 level, which may lead its prices towards 1.0930. Alternatively, the violation of 1.0800 level can lead EUR/USD towards the next support level of 1.0765. The downward breakout of 1.0765 can trigger a sell-off of up to 1.0725. Today, consider selling below 1.0800 and buying above this same level.
GBP/USD - U.K. Labor Report Slips
During Wednesday's early Asian session, the GBP/USD failed to stop its 3-day losing streak and dropped to 1.2285 while rendering 0.07% losses on the day, mainly due to the risk-off market sentiment on the back of intensifying coronavirus fears. The broad-based U.S. dollar strength also keeps the currency pair under pressure.
The GBP/USD is trading at 1.2298 and consolidates in the range between the 1.2274 - 1.2307. However, traders are cautious about placing any strong position ahead of March month inflation data. The criticism on the Tory government about handling the coronavirus crisis increasing day by day while the Health Secretary Matt Hancock said that the government is using every possible way to produce a virus vaccine.
In the meantime, the United Kingdom diplomat also discussed starting the human experiments for the pandemic vaccine and renewed self-isolation guidelines.
Almost 25 doctors of the U.K. were not showing satisfaction on the 7-day social-distancing rule against the World Health Organization's (WHO) 14-day period and got the same response from the Health Secretary Hancock. Whereas, the U.K.'s death toll cross 17,366, as per the latest report on Tuesday while the Reuters reported total cases rose above 129,000.
At the Brexit front, the SkyNews says that the ex-deputy PM David Lidington requests for the Brexit transition period delay. However, the UK PM Boris Johnson and the company are well known for its stability on the Brexit deadline and are expected to remain stand during the time of discussions with the European Union (E.U.). With everything going on, the Sterling is trading with a mixed bias. However, bears are taking a bit more control in the market.
GBP/USD - Daily Technical Levels
Support Resistance
1.2223 1.2397
1.2148 1.2496
1.1974 1.2671
Pivot Point 1.2322
GBP/USD – Daily Forecast
The bearish trend in GBP/USD continues as the pair is trading below pivot point level 1.2322, after violating the narrow trading range of 1.2500 - 1.2400. Selling bias seems strong as the Cable has not only violated sideways channel, but also holds below 50 periods EMA which is extending resistance around 1.2400.
We may experience a slight bullish recovery in the market, but the resistance level of 1.2335 is likely to hold the pair in a selling mode. Today, the GBP/USD may open further room for selling until 1.2300 and 1.2150. But in case, sterling violates 1.2325 resistance level; the market will be pone to 1.2511 resistance.
Good luck!