Forex Today: Currency Markets Appear to be Consolidating

  • The rate of increase globally in fatalities and new confirmed infections from the coronavirus pandemic continues to increase exponentially, with its epicenter now in New York. A world recession appears to be inevitable, with Goldman Sachs forecasting a 34% drop in U.S. Q2 annualized GDP and other analysts seeing a 30% unemployment rate in the near future. If correct, these will be the worst such numbers since the 1930s.
  • The rate of increase in new confirmed cases is now levelling off in much of hard-hit Europe, especially in Italy where it is actually falling, providing hope that lockdowns are beginning to show results. However, the daily death toll remains high in Europe and is beginning to increase strongly in the U.K. The strongest growth of the virus in the world now is happening in New York City and New York State, with the U.S.A. now leading the world in number of confirmed cases, having had over 5,000 deaths. In Europe, the United Kingdom and France appear statistically to be on course for only a slightly better outcome than Italy, with Spain heading for something even worse. The U.S Vice President admitted yesterday that the U.S.A. is likely to have an Italian-style outcome. The U.K. saw a strong jump in its death toll yesterday and the numbers there look set to worsen significantly as the first wave heads towards its peak.
  • World stock markets, especially in the U.S.A., look set to fall again after rallying for several days as President Trump markedly changes his tone on the coronavirus pandemic, forecasting up to 240,000 fatalities in the U.S.A. The Federal Reserve intervened yesterday to improve U.S. Dollar liquidity throughout the U.S. banking system.

  • WTI Crude Oil has recovered from its 18-year low to again trade above $20, where it may have found a bottom.
  • Currency markets appear to be consolidating and showing no clear direction again today.
  • Markets are affected by high relative volatility, although it is decreasing. This provides opportunities for traders, but close monitoring of trades on short time frames is very advisable due to the strength and speed of price movements.
  • The key factor in markets today will likely be how the U.S. stock market behaves when New York opens, as well as the U.S. unemployment claims data due later. Yesterday, the ADP Non-Farm Employment forecast came in much better than expected – but it was only a forecast.
Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.