Greenback rallies after President Trumps bullish comments
The greenback staged a strong rally against a basket of major currencies this week after US President Donald Trump commented that he supported a ‘strong US dollar’. The US dollar also benefitted from comments from Federal Reserve Chair Jerome Powell. Chair Powell ruled out the prospect of the central bank introducing a negative interest rate policy as he delivered a prepared policy statement to market participants. The EURUSD pair fell below the 1.0800 level after President Trump’s comments, while the GBPUSD pair plunged to its lowest trading level since early April.
- The USDJPY pair is only bullish while trading above the 106.90 level, key resistance is found at the 108.00 and 109.20 levels.
- If the USDJPY pair trades below the 106.90 level, key support is located at the 105.50 and 104.80 levels.
Bitcoin rallied back towards the $10,000 level this week, following an extremely volatile trading week for the pioneer cryptocurrency. Bitcoin started the trading week under heavy downside pressure after crashing towards the $8,000 level over the weekend. The BTCUSD pair soon recovered its previous bid-tone as the much-anticipated block halving event finally completed. Data showed that Bitcoin miners still remained bullish towards the cryptocurrency as its hash rate remained well-supported. The on-chain analysis also showed that long-term investors continued to hold onto their Bitcoin after the halving event.
- The BTCUSD pair is only bearish while trading below the $8,700 level, key support is found at the $8,400 and $8,000 levels.
- If the BTCUSD pair trades above the $8,700 level, buyers may test towards the $10,000 and $10,400 resistance levels.
The British pound fell against the US dollar and the Japanese yen currency this week, following comments from the new Bank of England Governor, Andrew Bailey. The British pound tumbled as Governor Bailey hinted that the UK economy may introduce more dovish policy measures to fight the economic effects of the coronavirus. Traders and investors also sold the British pound over fears that the central bank may have to cut interest rates even further. The British pound looked past negative Gross Domestic Product data from the United Kingdom economy this week, which showed that the economy had shrunk by two percent.
- 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 1.2000 levels.
Global stock markets came under pressure this week as tensions between the United States and China remained at elevated levels. US equity markets slipped as President Trump looked at introducing legislation against Chinese companies in the United States, and ordered a US Federal fund to stop investing in Chinese stocks. The price of gold and silver rose as risk-off sentiment increased as the relationship between the world’s two largest economies continued to fracture. Traders see gold as a safe-haven during increased geopolitical risks, while the price of silver often rises during times of conflict.
- XAUUSD is only bearish while trading below the $1,670 level, key support is found at the $1,650 and $1,610 levels.
- XAUUSD is bullish while trading above the $1,670 level, buyers may test towards the $1,750 and $1,800 resistance levels.