Greenback under pressure following rate cut; USOIL set to resume downtrend – Guest Editorial
USOIL is unlikely to recover in the near-term. Demand is set to decline even further, while at the same time, OPEC members led by Saudi-Arabia are boosting production says Milan Cutkovic a AxiTrader
Milan Cutkovic of AxiTrader takes a look at three important charts of the week.
The US Dollar has come under renewed pressure after the Federal Reserve has announced it will cut the key interest rate to 0.00-0.25 % and boost its bond buying program. Those measures come as a response to the Coronavirus outbreak which continues to wreak havoc and has triggered fears that a global recession is inevitable.
Here are 3 charts to keep an eye on as we enter what is likely to be another highly volatile trading week:
XAUUSD has bounced off $1500 support and given the broad risk aversion in global markets, demand is likely to increase in the short-term. Immediate resistance is seen at the 38.2 % Fibo of the March decline, followed by the 50 % Fibo around $1604. Should XAUUSD break above the psychological resistance level of $1600 could trigger momentum buying, and help it recover towards $1650.
USOIL is unlikely to recover in the near-term. Demand is set to decline even further, while at the same time, OPEC members led by Saudi-Arabia are boosting production. Traders are keeping a close eye on the $30 support level. A clear break below could pave the way for a retracement towards the March 9 low around $27.30.
GBPUSD recovered slightly, and the next major level to watch to the upside is 1.2485. Should the currency pair overcome this hurdle, a short squeeze might follow pushing Cable towards the 200 DMA (currently around 1.27). To the downside, immediate support is seen at 1.2245/50, followed by the October 19 low at 1.2190.
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