FOMC minutes confirms fears about US economy
The FOMC meeting minutes showed that all policy members agreed that the US economic outlook had deteriorated sharply since the coronavirus outbreak. The market reaction was largely muted with equity and commodity markets remaining unchanged, as most traders and investors had been anticipating dovish commentary to come from the FOMC. However, stock markets were generally in a bullish mood this week on hopes that the coronavirus may be starting to reach a peak across some European nations. The rate of infection and death continued to climb in the UK and the US.
- The USDJPY pair is only bullish while trading above the 106.50 level, key resistance is found at the 109.40 and 111.10 levels.
- If the USDJPY pair trades below the 106.50 level, key support is located at the 104.50 and 103.80 levels.
The cryptocurrency market enjoyed strong gains this week as trading volumes and bullish sentiment returned after the March crypto crash. Bitcoin traded to a four-week high as institutional money started to come away from the sidelines. Bitcoin CME futures and open interest also enjoyed a strong pick-up in early week trading as the pioneer cryptocurrency broke through the $7,000 level. Ethereum was also another strong performer this week, as the second-largest cryptocurrency posted double-digit gains and traded towards the $175.00 level.
- The BTCUSD pair is only bearish while trading below the $6,700 level, key support is found at the $6,500 and $6,000 levels.
- If the BTCUSD pair trades above the $6,700 level, buyers may test towards the $7,700 and $8,100 resistance levels.
The British pound staged a strong recovery against the US dollar this week, on hopes that the UK economy and PM Boris Johnson will soon recover from the coronavirus. Sterling fell in early week trading as British PM Boris Johnson went into hospital as his coronavirus symptoms started to become worse. The British pound eventually recovered as Johnson’s health became better and optimism started to grow that the coronavirus may start to peak in the United Kingdom over the coming days.
- The GBPUSD pair is only bullish while trading above the 1.2250 level, key resistance is found at the 1.2600 and 1.2800 levels.
- The GBPUSD pair is only bearish while trading below the 1.2250 level, key support is located at the 1.2150 and 1.1950 levels.
Oil prices rallied this week as OPEC members agreed to an oil production cut for two months after weeks of speculation. The news sent the price over $28.00 per barrel, although the rally did not last long. Oil prices had been starting rally during the week as speculation began to mount that Russia and Saudi Arabia would agree to the supply cut. Analysts and economics had noted that a supply cut was needed as inventory was starting to build on ports around the world as the coronavirus had severely impacted demand for oil.
- WTI oil is only bearish while trading below the $25.50 level, key support is found at the $23.00 and $21.00 levels.
- If WTI oil trades above the $25.50 level, buyers may test towards the $32.00 and $38.00 resistance levels.