Corona Virus
Stay Safe, FollowGuidance
Fetching Location Data…
Jignesh Davda

The markets initially continued in line with their trends after yesterday’s Fed meeting but have since reversed course. Equities and precious metals have erased some of their recent gains while the dollar is seen bouncing against all of its major counterparts in early trading on Thursday.

Federal Reserve Chair Jerome Powell cautioned that the economic recovery hinges on the ability to contain the Coronavirus.

He expressed optimism regarding the recovery in the labor markets but also indicated that economic indicators are suggesting the economic recovery may have stalled.

Nevertheless, policymakers remain data-dependent and will continue to assess incoming economic reports and progress in containing the virus.

Powell commended the government after an announcement earlier in the week of a new potential fiscal stimulus package that is said to be worth around $1 trillion. The Fed Chair reiterated that ongoing fiscal and monetary support is needed to aid the economy in its recovery after an economic downturn he called “the most severe in our lifetime.”

Later in the North American session, the US will release GDP figures for the second quarter. Analysts expect the economy to have contracted a staggering 34.5%.

The unemployment rate in the euro area was reported to rise to a 15-month high of 7.8% in June. Ahead of the report, the jobless rate had held steady between 7.3%-7.4% for five straight readings.

Technical Analysis

EURUSD 4-Hour Chart

The 1.1800 handle has proven to be a major hurdle as EUR/USD has made two failed attempts at the level this week.

There is some potential for a retracement at this stage, especially considering that the exchange rate is quite oversold.

The antipodean currencies are the heaviest in early trading on Thursday, and technical developments in AUD/USD and NZD/USD may offer a leading signal for the dollar’s next move.

Near-term support for the pair is seen at 1.1700 while it will take a break above 1.1800 for the pair to regain upward momentum.


Bottom Line

  • The markets have reversed course in early trading today. The dollar is recovering and the Antipodean currencies are hit the hardest.
  • GDP data will be released later in the day. As it is the first reading, a volatile reaction may be seen in the markets.

For a look at all of today’s economic events, check out our economic calendar.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Trade With A Regulated Broker

  • Your capital is at risk
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.