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2020 on Forex: the new forecasts

The coronavirus has changed everything. When analysts gave forecasts for 2020 at the end of last year, no one could foresee that the whole world would be seized by the pandemic. Call it a “black swan” or not, it’s necessary to re-evaluate the situation and adjust the medium- and the long-term outlook. Below you will find the analysis of the main Forex drivers and the overview of the prospects for the key commodities.

US recession

In 2019, economists had some fears of a potential US recession. Well, they were right not only about the USA, but also about the whole world as lockdowns pushed every country to the deep downturn. Now it’s clear that earlier the view was naturally more optimistic. How encouraging the US unemployment rate and NFP were at the end of 2019! We couldn’t imagine at that time that more than 33 million Americans would lose jobs and economic activity would fall to unprecedented lows. The Fed made a dire scenario for the prolonged US recession. All the needed measures have been taken, almost 3 trillion dollars were provided to support the market and additional aids are expected. Anyway, the US dollar gains as a safe-haven currency. The collapse of USD this year remains highly unlikely.

Central banks’ monetary policy

In December, we expected the Federal Reserve to be patient in its monetary policy decisions. At the same time, we didn’t underestimate the power of rate cuts due to recession fears. Coronavirus outbreak flipped the script with the Federal Reserve unveiling outstanding measures to support the suffering economy. The first rate cut from 1.5-1.75% to 1-1.25% happened at the beginning of March and was followed by an even bigger rate cut to the range of 0-0.25% just after a week. At the same time, the regulator announced an unlimited buying of mortgage-backed securities and plans to buy corporate bonds and bonds backed by consumer debt. Moreover, the Fed Chair Jerome Powell didn’t exclude the possibility of negative interest rates. Even though our forecasts were not 100% accurate, the upside for the USD has been indeed limited. As for the stock market, after a shock wave caused by Covid-19, the ultra-loose monetary policy pushed the indices up.
Other major central banks also joined the easing game. The Reserve banks of Australia and New Zealand cut their interest rate to unprecedented lows of 0.25%. The Bank of England and the Bank of Canada lowered their interest rate as well to 0.1% and 0.25% respectively. As for the European Central bank, it keeps the zero interest rate on hold. The supportive tool the ECB presented is the 750 billion euro Pandemic Emergency Purchase Programme (PEPP) aimed to counter the serious risks to the outlook of the Eurozone.
As all major central banks conduct almost similar easing policy, the Forex pairs can fluctuate within certain levels for a long period. That is actually a good news for range-bound traders, as channels are expected to remain quite strong.
ECB
The European Central Bank let the market know that it was aiming to do whatever it takes to save the euro area from the coronavirus damage. However, trouble always brings his brother: Germany was so tired to be the sponsor of the unlimited bond-purchasing ECB program that the German court claimed that it actually violated constitution. Now, the ECB has three months to explain that purchases were "proportionate". The ECB credibility is under threat as Germany may pull out of the next ECB's bond purchases. This situation has made euro quite volatile.

Brexit

Boris Johnson hasn’t kept his promise “to get Brexit done” yet. However, we can forgive him for that as this year brings much worse problems to deal with. Now, when countries are getting over the coronavirus shock, the UK and EU should hold the last round of trade talks and finalize an agreement by the end of December. Some analysts are skeptical about that. They think the deadline could be extended beyond the end of December, leaving the UK subject to tariffs on most goods. This would be devastating for the British pound. The sooner the UK and EU make a deal, the better for GBP.

Oil

Oil prices spent last year between $50 and $70. December was positive with the US and China ceasing fire in the trade war and OPEC extending production cuts. Possibility of a scenario where prices drop to 0 and below was absolutely inconceivable even for the most pessimistic observers, and yet it came true. It marked the beginning of 2020 with historically unseen turbulence, even apart from the coronavirus hit.
In the long term, however, there are all fundamentals for oil prices to get back to where they were. However, that may not happen this year. Observers predict that oil prices will recover to the levels of $55-60 if there is nothing in the way during the year. Otherwise, $30 is seen as the safest baseline level for the commodity during 2020.

Stocks

Just like in 2019, the stock market had a nightmarish beginning of 2020. S&P lost 35%, with some stocks losing more than 50% of value. As the summer season is coming, the market sees 50% of the losses recovered in most sectors. While the shape of recovery is being discussed, most analysts agree that after the worst-performing Q2, the S&P will continue restoring its value.
Notice that the situation is different for different stocks. Locked by the anti-virus restrictions, most of the world population was forced to spend weeks and months at home facing their TVs, laptops, and desktops. That made strong Internet-related companies blossom, so we saw Amazon and Netflix rise to even higher value than before the virus. On the contrary, the healthcare sector struggling to invent the vaccine saw Moderna, BionTech, Inovio, and other new and old pharma companies surge to unexpected heights.
IT and Internet communications companies will likely gain much more attention during the year.
Google, Nvidia, Disney, Apple, and many more around the IT and Internet sectors have the full potential to spearhead the S&P in 2020 and further on.
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EUR/USD and GBP/USD Forecast January 10, 2020 Forex Analysis Today - Live GBP USD Forecast Today Part 2 (21 April 2020) Forex Analysis Today - Live GBP USD Forecast Today EUR/USD and GBP/USD Forecast March 3, 2020 Live Forex, Trading Nonfarm Payrolls (NFP), EUR/USD, GBP/USD, USD/CAD, - پخش زنده معاملات فارکس Pre-NFP US Dollar Price Action Setups: EUR/USD, GBP/USD, USD/CAD, AUD/USD Forex Analysis Today - Live GBP USD Forecast Today (20 April 2020)

GBP/USD, also known by its nickname cable, represents the amount of USD that can be purchased with one British pound. GBP was pegged to the US dollar in 1940 and became part of the Bretton Woods system which governed post-war exchange rates, and with the collapse of the system the pound became free-floating in 1971. Historically, the pound and ... Hi all, Above you find the best pairs to trade whether you are expecting a strong USD or a weak USD. This is based on the overall currency strength. NOTE: The direction of the NFP is most often the remaining directing of the day on the weakest respective strongest pairs depending on whether USD comes strong or weak. Example: If we expect a strong NFP, pairs like AUD/USD will keep on going ... The NFP report generally affects all major currency pairs, but one of the favorites among traders is the GBP/USD. Because the forex market is open 24 hours a day, all traders have the ability to ... As the NFP is the American indicator, it will definitely affect the US dollar. Some analysts suggest choosing either GBP/USD or EUR/USD for trading. However, the EUR/USD pair tends to be more volatile on this release. Trading ahead of the NFP release. As it is a widely expected event, we can see that the volatility goes down before the NFP is ... Non-farm payroll figures are highly anticipated by forex traders every month, as they have a big impact on the FX market. Find out more, and how to trade NFP. To construct the NFP forecast, the median and average of economists' forecasts are drawn. All data can be easily found on FXStreet, where ... The final short-term NFP Forex strategy is waiting. This strategy consists of entering the market following false signals or a price reversal. This approach is suitable for novice and conservative traders. The goal is to leave the violent movements ... NFPand Forex Trading: Principal Points of Discussion The publication of the data about the Non-Farm Payrolls (NFP) generates volatility in the trading market. The NFP measures the monthly net evolution of employment. Forex traders use the economic calendar to prepare for this publication. What Is the NFP? Nonfarm Payrolls (NFP) in the US rose by 638,000 in October beating market expectations. The solid report has not really resonated with FX markets much. The exception is USD/JPY as it is the only ... View forex and gold market outlook predictions and analysis for the week ahead - covering the major currencies. NFP Preview: What to Expect from the Final Pre-Election Jobs Report Matt Weller, CFA, CMT October 1 ... NFP Forecast. As regular readers know, there are four historically reliable leading indicators that we watch to help handicap each month’s NFP report, but due to a calendar quirk, the ISM Non-Manufacturing PMI report won’t be released until Monday. That leaves us with the following ...

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EUR/USD and GBP/USD Forecast January 10, 2020

Forex Analysis Today - Live GBP USD Forecast Today (20 April 2020) My Real Time Analysis on GBP to USD live trade Be sure to Like, Subscribe, and hit that Notification Bell now! ===== RESOURCES ... Millions of traders from around the world seek out DailyFX for up-to-date forex alerts, news and analysis. Think of us as your trading friends that have access to institutional level research ... Pre-NFP US Dollar Price Action Setups: EUR/USD, GBP/USD, USD/CAD, AUD/USD - Duration: 1:01:17. DailyFX 1,036 views 🔴 Live Forex Signals Forecast EURUSD & USD JPY & GBPUSD H1 & M5 Forex Signals 29 watching Live now Cara trading Dengan mengunakan berita NFP nonfarm payroll - Duration: 5:43. Forex Analysis Today - Live GBP USD Forecast Today My Real Time Analysis on GBP to USD live trade Be sure to Like, Subscribe, and hit that Notification Be... EUR/USD and GBP/USD Forecast January 10, 2020 ... Cara Trade News Non-farm Payroll NFP Forex Trading EUR/USD by Khalid Hamid TFS 04 Mac 2016 - Duration: 8:40. TFS Price Action Trading Recommended ... Forex Analysis Today - Live GBP USD Forecast Today Part 2 (21 April 2020) GBPUSD Trade,before and After Be sure to Like, Subscribe, and hit that Notification Bell now! ===== RESOURCES & LINKS ...

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