Coronavirus – MaiMarFX

We saw a strong market reaction with a broad-based sell-off on Tuesday after Federal Reserve Chair Jerome Powell signaled his appetite for faster tapering of the Fed’s stimulus, speaking unexpectedly in a more hawkish tone. He warned that high inflation could justify ending asset purchases sooner than planned. On top of that, bearish momentum accelerated amidst anxiety around the coronavirus. Stocks and counterparts of the greenback fell sharply following Powell’s testimony.

However, markets returned to normal following the hawkish shift while EUR/USD and GBP/USD finally ended yesterday’s trading day virtually unchanged.

EUR/USD: We still see some room for a bullish extension toward 1.1430, provided that the euro is able to hold above 1.1250.

GBP/USD: The cable plunged to a low of 1.3194 before stabilizing above 1.3280. We now see a next higher target at 1.3450. Falling again below 1.3240 we will turn our focus to a lower price target at 1.3150.

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Dear traders,

The European Central Bank stood pat for now and finally did not surprise the market at yesterday’s policy decision. Policy makers, however, paved the way for a fresh easing package in December. The ECB held its pandemic bond-buying program at 1.35 trillion euros, reiterating that it will run until at least June 2021 and won’t be stopped until the “crisis phase” of the pandemic is past.

The euro reacted in line with the market’s expectations and slid slightly lower to a low of 1.1650. We were able to book a good profit yesterday by trading our short entry.

Fasten your seat-belts for next week’s U.S. election while uncertainty remains elevated. Volatility is expected to pick up next week and traders around the globe prepare for large market movements.

We will be back on Monday and until then we wish you a wonderful and relaxing weekend!