TriumphFX Forex Analysis – EUR Pairs – April & May 2020


EURAUD- Daily and 4 Hour Charts

EURAUD Daily Chart
EURAUD 4 Hourly Chart

As suggested in our last EUR chart analysis, price has been bullish and has swung higher.

EURAUD continues to uptrend on the daily chart and is currently in a strong retrace phase. Price has retraced below all Fib levels, suggesting that price could struggle to swing higher. The daily moving averages are bullish and widening though, signalling more potential upside. The 4 hour chart has formed a diagonal trend resistance area and the moving averages have crossed bearish – confirming the struggle price may have to swing higher.

Buying opportunities may exist around the daily moving averages, if EURAUD closes above the 4 hour trend resistance and around the horizontal levels at 1.7030, 1.6620 and 1.6100. A bullish move could be rejected or reverse around the 4 hour trend resistance area and around the horizontal levels at 1.7820, 1.8885 and 1.9595.

The Reserve Bank of Australia (RBA) cut rates again in their April 2020 meeting. Rates were cut by a further 0.25%, bringing the official bank rate to 0.25% (a record low). Rates have since stayed the same. The current low rate is needed to help reduce the unemployment rate and stimulate the economy due to COVID-19 recession fears. The RBA will continue to monitor the labour market and inflation. Rates will not be raised until targets are met.

The European Central Bank (ECB) continue to keep rates at the record low of 0.00%. Rates have not been cut into negative territory, despite the COVID-19 outbreak. Instead, the ECB has launched an asset buying program. Due to weak trade growth and economic forecasts, rates are likely to stay low for the foreseeable future. The COVID-19 pandemic is just another economic challenge for the Euro zone.

EURCAD – Daily and 4 Hour Charts

EURCAD Daily Chart
EURCAD 4 Hourly Chart

The EURCAD has been bullish. Price has formed a clear higher high and is above a number of key resistance levels, suggesting that the EURCAD could start up-trending. The moving averages confirm this – they have crossed bullish and are widening. Price is currently in a retrace move and is finding support around the 50.0% Fib level and previous daily horizontal resistance at 1.5145. EURCAD on the 4 hour chart has been down-trending as price retraces on the daily. Price action has formed a diagonal resistance area.

Opportunities to go long may exist around the 50.0% and 61.8% Fib levels, around the daily dynamic support of the moving averages, if price closes above the 4 hour diagonal resistance area and around the horizontal levels at 1.5145, 1.4910 and 1.4740. A bullish move could find resistance around the 4 hour moving averages, around the 4 hour diagonal resistance area and around the horizontal resistance levels at 1.5765, 1.5845 and 1.5965.

The Bank of Canada (BOC) followed the US by slashing it’s benchmark interest rate. The intent of the rate cut is to help boost the economy during the COVID-19 pandemic. The current rate is now 0.25%. The economy is currently performing well and inflation targets are currently at their potential. If coronavirus fears deescalate, the BOC could increase rates again in the near future.

The European Central Bank (ECB) continue to keep rates at the record low of 0.00%. Rates have not been cut into negative territory, despite the COVID-19 outbreak. Instead, the ECB has launched an asset buying program. Due to weak trade growth and economic forecasts, rates are likely to stay low for the foreseeable future. The COVID-19 pandemic is just another economic challenge for the Euro zone.

EURGBP – Daily and 4 Hour Charts

EURGBP Daily Chart
EURGBP 4 hourly Chart

As suggested in our last EUR analysis, the EURGBP closed above the tight range resistance area and was then bullish.

Price is now moving in a much wider range on the weekly time-frame (0.8300-0.9320). The daily moving averages confirm the market indecision – they have been crossing frequently. EURGBP on the 4 hour time-frame has been bearish but is also showing signs of indecision.

Trading opportunities could exist around the support and resistance areas of the weekly range and if price closes out of the range. Trading opportunities could also exist around the horizontal levels at 0.8535, 0.8845, 0.9085, 0.9360 and 0.9470.

The European Central Bank (ECB) continue to keep rates at the record low of 0.00%. Rates have not been cut into negative territory, despite the COVID-19 outbreak. Instead, the ECB has launched an asset buying program. Due to weak trade growth and economic forecasts, rates are likely to stay low for the foreseeable future. The COVID-19 pandemic is just another economic challenge for the Euro zone.

The Bank of England (BOE) has followed other central banks and has cut rates to combat economic challenges caused by the COVID-19 pandemic. The UK interest rate is now set at 0.10% (a historic low). The UK has now left the EU, meaning that Brexit uncertainty should weigh less heavily on the Pound.

EURJPY – Daily and 4 Hour Charts

EURJPY Daily Chart
EURJPY 4 Hourly Chart

As suggested in our last EUR chart analysis, price has been bearish and has continued to reverse around the daily trend resistance area.

EURJPY continues to be bearish but is potentially starting to range between the daily support at 116.10 and the daily resistance at 123.10. The moving averages are tight and moving sideways – confirming the potential indecision. Price is also ranging on the 4 hour chart (116.55-121.20). The moving averages are bearish and steady though, suggesting that EURJPY could break lower.

Trading opportunities may exist around the support and resistance areas of both ranges and if price moves out of either range (break-out trade).

The European Central Bank (ECB) continue to keep rates at the record low of 0.00%. Rates have not been cut into negative territory, despite the COVID-19 outbreak. Instead, the ECB has launched an asset buying program. Due to weak trade growth and economic forecasts, rates are likely to stay low for the foreseeable future. The COVID-19 pandemic is just another economic challenge for the Euro zone.

The Bank of Japan (BOJ) continues to keep interest rates at the record low of -0.10%. The Japanese economy is performing well and showing signs of expansion. COVID-19 recession fears could stunt economic growth though.

EURUSD – Daily and 4 Hour Charts 

EURUSD Daily Chart
EURUSD 4 Hourly Chart

The EURUSD has become very choppy and indecisive on the daily time-frame. The daily moving averages are bearish and steady, signalling that price may move lower. The price action and moving averages on the 4 hour time-frame are also showing signs of indecision.

Trading opportunities could exist around any of the identified horizontal levels at 1.0655, 1.0785, 1.0985, 1.1135, 1.1240, 1.1400, 1.1425 and 1.1450.

The Federal Reserve has announced a record breaking stimulus package, aimed at US households and employers. The US Federal Open Market Committee (FOMC) has unexpectedly cut rates by 150 points due to heightened concerns regarding the COVID-19 outbreak. The current Fed Funds rate is currently 0.25%, back at post-2008 levels. There is some concern that keeping rates low could cause greater issues in the US’ financial sector. The USD has been acting as a safe haven amid the COVID-19 outbreak. There are some concerns that the COVID-19 pandemic may hit the US hardest, causing a reversal of the recent USD strength.

The European Central Bank (ECB) continue to keep rates at the record low of 0.00%. Rates have not been cut into negative territory, despite the COVID-19 outbreak. Instead, the ECB has launched an asset buying program. Due to weak trade growth and economic forecasts, rates are likely to stay low for the foreseeable future. The COVID-19 pandemic is just another economic challenge for the Euro zone.

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