Jun 03 2020 0
There was a significant fall for the USD yesterday, which obviously will drag down the major currency pairs. Check out our chart analysis for today and see what forex trading strategies you should apply.
- At first, it was only peaceful protests, which later turned into violent protests with numerous looting in the United States. President Donald Trump threatened during a call with state governors that they would send troops if they could not control the situation in their state.
- Chinese government officials have called on large state-owned agricultural companies to suspend purchases of several US agricultural products including soybeans. This is a move considered to undermine Beijing's earlier promise that it will increase purchases under the Phase 1 trade agreement it signed earlier this year.
- The German stock market reached its highest level in three months, dragging the EU market together when it was reported that the bloc's No. 1 economy government would debate another stimulus package on Tuesday.
- Oil prices rebounded sharply in the hope that OPEC and Russia will extend the output restriction agreement, which may come later this month.
What we expected and waited for finally happened: there was a quite convincing breakout in the 108 zone. Although there are signs of a pullback on the H4 chart, this is normal after a breakout. You can wait for buying opportunities around the zone 108 - 108.2. The short term target is 109.
As warned, there will not be a significant reversal in zone 1.13. After the narrow accumulation price, the upward momentum has continued and is heading to the 1.24 level, which is expected to make selling pressure at this price area. You can make risk reduction moves here. If there is no significant reversal signal, we can continue to add positions and target the zone 1.34.
GBP/USD continued to surprise when it easily broke through the 1,250 zone and reached its highest peak in months - the level of 1,265. I still reserve the view that GBP's rally will not be stable and this may be the time we are ready for sell orders. The RR level at this price range is also quite good. Take action when there is a signal. However, any subsequent breakout could confirm the longer-term bullish momentum on GBP/USD. We need to set our Stop Loss carefully.
Things are still going smoothly on the USD/CAD chart. The price zone that has been vacant since March is gradually being filled. Short positions can continue to be maintained, but risk reduction actions are needed. The possibility of the bulls to counterattack in the 1.34 zone is very high.
AUD/USD continues to conquer new highs. However, like GBP/USD, I note the possibility of strong and unexpected pullbacks. This is not the time to buy anymore but to take profits if there are long orders, and prepare for the recovery waves.