Italy shows more rounds of disappointing data
US and European stock markets are in a bearish trend and there are no real reasons the situation will change. In fact, the volatility of the stock indices reflects the real mood and expectations of large investors - a panic mood. The reason for the panic is total quarantine in most European countries, as well as other countries in the world.
It is worth noting that by the end of last week, the amount of sellers, both on the stock market and foreign exchange market, had noticeably declined. For example, buyers of the EUR / USD and GBP / US currency pairs managed to compensate for some of the lost positions. But today we are seeing a moderate weakening of EUR and GBP.
So, the quotes of the EUR / USD currency pair returned to the psychological level of 1.0700, while only a break of support at 1.0650 will indicate the possibility of a further selloff to 1.0570 and 1.0500. The situation with the GBP / USD currency pair is similar - after an unsuccessful attempt by buyers to push the pound higher, the pair returned to the support level of 1.1655. As a result, the risk of a breakdown of support at 1.1540 and a further decline to 1.1425–1.1465 is quite possible.
Let me remind you that the ECB continues to use not only verbal interventions, but also various tools to stabilize the economy. At the same time, regular statements by representatives of the ECB about the readiness to participate more actively if necessary, play an important role, thereby providing support to the stock market while at the same time putting pressure on the EUR.
Turning to the oil market, which continues to decline, I note the increasing risk of a collapse in the price of WTI in the region of $ 16– $ 18 per barrel. At the same time, I do not expect prices to remain at this level for the long-. Therefore, I consider the decline in oil prices as a more favorable point for opening long positions. Of course, we are talking about medium-term trading in the context of several weeks, possibly even months.
To sum up, I will turn to the US and their attempts to restrain panic in the financial markets, as well as among the population. We are talking about a package of incentive measures for some sectors of the economy, for example, industrial, as well as airlines, small businesses and households. They plan to allocate at least $ 1 trillion for this, which should help markets avoid further losses in the long run.
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