TriumphFX Forex Analysis – USD Pairs – April & May 2020

AUDUSD – Daily and 4 Hour Charts

As suggested in our last AUD chart analysis, the AUDUSD has been bearish and has moved lower.

Just like other AUD pairs, the AUDUSD is clearly down-trending on the daily time-frame. Price is currently in a retrace move. The daily moving averages are bearish and widening, signalling that price may attempt a bearish move lower. The AUDUSD has formed higher swing highs and lows on the 4 hour time-frame.

Opportunities to go short could exist around the 61.8% Fib retrace level, around the bearish daily moving averages and around the horizontal levels at 0.6455, 0.6665, 0.6755 and 0.7015. A bearish move may find support around the 4 hour trend support area, around the 4 hour moving averages and around the horizontal levels at 0.6190, 0.5990, 0.5745 and 0.5555.

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 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.

EURUSD – Daily and 4 Hour Charts

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 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.

GBPUSD – Daily and 4 Hour Charts

As suggested in our last GBP analysis, the GBPUSD broke lower and was bearish.

Price has since been retracing the sell-off and is starting to look indecisive on the daily time-frame. The daily moving averages confirm the market indecision – they have been crossing frequently and are moving sideways. Price action has formed a bearish trend resistance on the daily time-frame, suggesting that the GBPUSD may attempt a bearish move. The 4 hour time-frame is also looking indecisive.

Trading opportunities could exist around the 4 hour and daily moving averages, around the daily trend resistance area and around any of the identified horizontal levels at 1.1490, 1.2015, 1.2210, 1.2625, 1.2760, 1.3185 and 1.3465.

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.

USDCAD – Daily and 4 Hour Charts

As suggested in our last USD analysis, the USDCAD has been bullish and has swung higher.

Price has been up-trending on the daily chart. The USDCAD is currently in a retrace move and is coming off the 50.0% retrace level. The moving averages are bullish and widening, signalling that the upside direction could continue. The 4 hour chart shows a downtrend as price has been retracing on the daily chart. The USDCAD has formed a diagonal resistance on the 4 hour.

Long opportunities may exist around the 50.0% and 61.8% Fib levels, around the daily moving averages, if price closes above the 4 hour diagonal resistance and around the previous horizontal resistance at 1.3535. A bullish move could be rejected or reverse around the 4 hour diagonal resistance and around the horizontal resistance levels at 1.4250, 1.4495 and 1.4650.

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.

USDCHF – Daily and 4 Hour Charts

USDCHF is down-trending within a potential daily bearish channel. The daily moving averages are bearish and widening, signalling that the bearish direction may continue. Recent price action has been choppy though, signalling potential market indecision. The 4 hour chart confirms the current indecision – the moving averages have been crossing frequently and price has been moving sideways.

Trading opportunities could exist around the support and resistance areas of the bearish channel and around any of the identified horizontal levels at 0.9270, 0.9245, 0.9495, 0.9595, 0.9785, 0.9885, 1.000 and 1.0205.

USDJPY – Daily and 4 Hour Charts

The daily time-frame is showing clear signs of market indecision – price action has been choppy and has been moving sideways. The daily moving averages confirm the indecision – they are tight and are moving sideways. The 4 hour time-frame is also indecisive.

Trading opportunities may exist around any of the horizontal levels at 102.25, 103.05, 104.80, 107.05, 109.20, 111.30 and 112.10.

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.

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