TriumphFX Intraday Forex Analysis – 1 Hour Charts – May 05, 2020

***Coronavirus fears are driving markets – cash fleeing to safe-haven currencies (CHF, JPY, USD). Stock markets down***

AUDUSD

The AUDUSD has been retracing some of the recent sell-off. Price is down-trending on higher time-frames, suggesting that the AUDUSD may move lower. The moving averages confirm this – they are bearish and are widening.

Selling opportunities could exist around the longer-term moving average and around the 50.0% and 61.8% Fib levels. A bearish move may find support around the shorter-term moving average and around the horizontal support levels at 0.6375, 0.6340 and 0.6295.

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.

A US non-manufacturing PMI figure will be released at 1400 UTC today.

EURGBP

The EURGBP has been bearish but continues to be indecisive. The moving averages have been crossing frequently – confirming the market indecision.

Trading opportunities may exist around the moving averages and around the horizontal levels at 0.8675, 0.8810 and 0.8850.

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.

There is no major scheduled news today that will directly impact this currency pair.

EURUSD

As suggested in yesterday’s chart analysis, price has become indecisive. The moving averages confirm the current indecision – they are tightening and are moving sideways. EURUSD is also indecisive on higher time-frames, providing no clear trend direction.

Trading opportunities could exist around the moving averages and around the horizontal levels at 1.0810, 1.0890 and 1.1005.

A US non-manufacturing PMI figure will be released at 1400 UTC today.

GBPUSD

Price is currently finding resistance around the shorter-term moving average (as suggested in yesterday’s chart analysis). The GBPUSD is now looking indecisive. The moving averages are tight and moving sideways – confirming the market indecision.

Trading opportunities may exist around the moving averages and around the identified horizontal levels at 1.2310, 1.2395, 1.2405, 1.2610 and 1.2645.

A US non-manufacturing PMI figure will be released at 1400 UTC today.

NZDUSD

As suggested in yesterday’s chart analysis, NZDUSD is reversing around the horizontal level at 0.6075. Price is now looking indecisive and lacking trend momentum. The moving averages confirm the market indecision – they are moving sideways.

Trading opportunities could exist around the moving averages and around the horizontal levels at 0.5980, 0.5995, 0.6010, 0.6075 and 0.6165.

The Reserve Bank of New Zealand (RBNZ) unexpectedly slashed it’s official rate to 0.25% (a record low). Due to poor economic indicators, there are no forecast rate hikes in the near future. The country was already in recession before the COVID-19 pandemic.

A US non-manufacturing PMI figure will be released at 1400 UTC today. New Zealand unemployment rate and employment change figures will be released at 2245 UTC.

USDCAD

USDCAD is currently finding support around the 38.2% Fib level (as suggested in yesterday’s chart analysis). Price is currently in a retrace phase after forming a higher swing high. The moving averages are bullish and widening, signalling that USDCAD could swing higher. Price is up-trending on higher time-frames, adding confidence of a potential bullish move.

Buying opportunities may exist around any of the key Fib levels, around the longer-term moving average and around the horizontal level at 1.4000. A bullish move could be rejected or reverse around the shorter-term moving average and around the horizontal levels at 1.4150, 1.4195 and 1.4245.

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.

A Canadian trade balance figure will be released at 1230 UTC today. A US non-manufacturing PMI figure will be released at 1400 UTC.

USDCHF

As suggested in yesterday’s chart analysis, price is finding resistance around the longer-term moving average and the trend resistance area. USDCHF is down-trending and is currently in a retrace phase. The moving averages are bearish, signalling that the downside momentum may continue. Price is also down-trending on higher time-frames, adding confidence that price will form another bearish move.

Shorting opportunities could exist around the longer-term moving average, around the trend resistance area and around the horizontal levels at 0.9675 and 0.9720. A bearish move may find support around the shorter-term moving average and around the recent lows at 0.9595.

The Swiss National Bank (SNB) continues to keep rates at the all-time low of -0.75%. The Swiss economy continues to be stagnant. The economy was showing signs of positive momentum but COVID-19 is causing the economic to contraction. The Swiss Franc continues to be highly valued as a safe-haven currency. The SNB recently announced that it will continue to intervene with in foreign exchange markets but will likely keep rates unchanged until at least 2021.

A US non-manufacturing PMI figure will be released at 1400 UTC today.

USDJPY

Price continues to be indecisive and lack trend direction. The moving averages confirm the market indecision – they have been crossing frequently.

Trading opportunities may exist around the moving averages and around the horizontal levels at 106.40, 106.95, 107.35 and 107.90.

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.

A US non-manufacturing PMI figure will be released at 1400 UTC today.

XAUUSD

As suggested in yesterday’s chart analysis, GOLD has reversed around the trend resistance area. Price is now finding support around the moving averages (as also suggested). XAUUSD is down-trending. The moving averages are tight and moving sideways, signalling potential market indecision. GOLD is up-trending on higher time-frames, signalling a potential upside move.

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