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The currency market is still extremely boring and uninteresting due to the increased uncertainty factor.
As previously noted in our reviews, the dynamics of the currency market are under the full control of mutually exclusive forces that compensate for the weakness of some currencies through the same weakness of others. The US dollar is in demand against the background of problems in the global and us economy, but it can not significantly add to the main currencies, and not only to them, because of large-scale stimulus measures from the US Treasury and the Fed, which make its supply in the financial system significant. If the situation were not like this in the world, it would have declined noticeably long ago.
At the same time, competing currencies of the US dollar are also experiencing problems and are under pressure from weakening measures from their central banks.
The single currency remains a captive not only to the ECB incentive measures, but to the crisis in relations between Germany and the EU. The Germans oppose the widespread flooding of Europe with liquidity by analogy with the Fed. This dispute can cause both the prospective weakness of the euro due to large-scale supply in the European financial system, and the destruction of the monetary union in Europe.
On the other hand, the pound suddenly unexpectedly experienced not only coronavirus problems, but also the return of the Brexit crisis, which caused a noticeable decline in recent days.
The yen and the Swiss franc in pairs with the dollar hang in narrow side ranges, not receiving any support, but are under noticeable pressure. The reason for this is the uncertainty factor in the prospects for the global, and more precisely, the European and American economies after the COVID-19 pandemic.
In turn, commodity currencies — Canadian, Australian, and New Zealand dollars seemingly supported by cuts in OPEC + crude oil production to stimulate higher prices and maintain adequate demand, are balancing in the "sideways" again. The reason for this is the risk of a full-scale trade war between the United States and the PRC, as well as the probability of incitement of an American military conflict between countries.
Well, in general, of course, after the April revival in the markets, investors, who are frightened by the WHO, which declared the impending second wave of the pandemic, tend not to take risks, but to take a balanced and balanced position, trying to see clear, contrasting reasons for starting active actions before taking decisive measures.
Assessing the situation on the market, we believe that this state of affairs may persist until the end of the current month.
Forecast of the day:
Our forecast for the EUR/USD pair remains the same. It is likely to continue to decline after the formation of the continuation of the trend of the "rising flag". If it falls below the level of 1.0800, there is a possibility that it will decline to 1.0765, and then, possibly to the level of 1.0725.
The USD/CAD pair is consolidating in the "side". It will be able to decline amid the increase in oil prices to 1.3860 after declining below the level of 1.4020.
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