30.04.202021:24 Forex Analysis & Reviews: EUR/USD and GBP/USD. The results of April 30. ECB announced readiness to expand existing incentive and lending programs and launch new ones

4-hour timeframe

Average volatility over the past five days: 76p (average).

For the most part of the fourth trading day of the week, the EUR/USD pair was still trading as indistinctly as the entire first half of the week. With grief in half, quotes of the pair got out of the Ichimoku cloud, however, very briefly, as they literally returned within a few hours and began the next round of a downward correction. Thus, the upward trend persists, and the quotes jumped during the US session. The buy signal from Ichimoku Golden Cross has intensified, and today's volatility (at the time of writing) is 140 points. The most important macroeconomic indicators were published in the European Union today, the results of the ECB meeting were summed up, and the United States released the next data on applications for unemployment benefits, which have become one of the most significant indicators of the state of the American economy in recent weeks. However, traders did not particularly react immediately after all these indicators were released. Only later did the barrier seem to be lifted, after which both the euro and the pound began to grow. Question: what was the reaction to this growth? Yesterday, equally important data were published in the United States, and there was no reaction to them. The results of the Federal Reserve meeting were summed up late in the evening, and although it was generally believed to be boring, uninteresting and passing, traders still got some information. Namely, the Fed does not plan any changes in the parameters of monetary policy in the near future. Thus, the Fed will now wait for the results of those actions that have already been carried out, and wait for the growth of the US economy no earlier than the third and fourth quarters of 2020.

There were so many macroeconomic statistics today that most of them can simply be omitted as secondary. For example, data from Germany. Retail sales decreased by 2.8% in March, which, of course, is worse than forecasted. The unemployment rate jumped to 5.8%, which is again worse than experts' forecasts, and the number of unemployed in April increased by 373,000 with a forecast of +76,000. And remember, at the end of March we were surprised at low unemployment in Germany? Back then it increased by only 0.2%, and the number of applications for benefits filed reached only 1,000 employees. We were still surprised at these figures, since there was a feeling that there was no crisis and epidemic in Germany. It turns out that business did not fire employees only in the first weeks of the crisis, in the hope that quarantine would be short-lived, but a wave of layoffs had already begun in April, which resulted in 373,000 new unemployed.

Oddly enough, the package of macroeconomic statistics from the eurozone turned out to be very optimistic, given the current realities. For example, the unemployment rate in March increased from just 7.3% to 7.4%. This indicator can be estimated in different ways, since in the United States, for example, the usual unemployment rate is much lower. In Germany, this figure, even taking into account the April layoffs, is still lower. Thus, the unemployment rate in the EU as a whole can be considered high, but avoided even stronger growth. But this is in March. In April, unemployment is likely to jump in the same way as in Germany. According to preliminary estimates, the consumer price index in April slowed down to just 0.9% y/y (the previous value of 1.0%). And here the situation is the same as with unemployment. The inflation rate is extremely low, but not surprisingly, it managed to avoid a stronger slowdown in a crisis. As for the Gross Domestic Product in the EU for the first quarter, the situation here is even more interesting. In annual terms, the indicator lost 3.3%, and in the quarterly 3.8%. Forecasts predicted a smaller reduction, but compared with the US, the loss of the European economy is lower. Again, it depends on the angle you're looking at. We believe that it could be much worse, therefore, we consider it relatively optimistic or at least not a failure.

The European Central Bank meeting has already ended, but the press conference is still ongoing. Therefore, this event will be discussed in the following articles. So far, we can only say that the ECB has left the size of key rates unchanged, and also announced its readiness to expand the program to support the economy in the fight against the negative impact of the coronavirus. In principle, such actions of the European regulator can be regarded as dovish, and the European economy, it turns out, needs additional support and stimulation, although this was no secret to anyone. We should not forget that the European Council also intends to adopt a 2-trillion-dollar program to help the economy.

The last thing traders should pay attention to today is the report on applications for unemployment benefits in the US. The index of initial applications reached 3.8 million more in the week of April 24, which is higher than forecasted values. The rate of repeated applications for unemployment benefits hit 18 million with a forecast of 19.2. Thus, we can even say that we received more optimistic data than expected, although the number of Americans who lost their jobs still remains gigantic. Also today it became known that personal incomes of Americans decreased by 2% in March, which has not happened since 2013, and personal expenses decreased by 7.5%, which has never happened in the past 60 years, according to official statistics. As a result, after all the publications on the US trading session, the greenback began to weaken against both currencies. Since European news was not related to the pound, the conclusion suggests itself that the US data is to blame. But the report on applications for benefits turned out to be slightly better than expected, it turns out that the US currency began to become cheaper due to reports on personal income and expenses of Americans?

4-hour timeframe

Average volatility over the past five days: 98p (high).

The GBP/USD pair was trading as indistinctly as the EUR/USD pair for most of April 30. Unlike the euro/dollar pair, the British pound's quotes grew during the day, which, however, does not make it possible to draw any conclusions regarding the impact of macroeconomic statistics on the movements of both pairs. One can, of course, assume that European statistics held back the euro to continue to strengthen today in the morning, but why then did the pound rise at the same time? Especially in the morning, when no information has yet arrived from the United States, and no reports were planned in the UK on Thursday? Thus, we are still inclined to the conclusion that the fundamental background now has no effect on traders. It simply continues to be ignored, no matter what happens, no matter what reports are published. Based on this, we still advise you to pay attention to technical analysis.

Recommendations for EUR/USD:

For short positions:

The EUR/USD pair continues to strengthen the upward movement on the 4-hour timeframe. Thus, euro-currency sales can be considered not before the price consolidates below the Kijun-sen line with the first target as the support level of 1.0733.

For long positions:

Long positions are currently relevant, goals at 1.0950 and 1.0985, the first of which has already been worked out. A rebound from any target will signal the beginning of a downward correction.

Recommendations for GBP/USD:

For short positions:

The pound/dollar pair resumed the upward movement. Thus, traders are advised to return to selling the British currency while aiming for a volatility level of 1.2369, not before consolidating the pair below the Kijun-sen line.

For long positions:

Purchases of the GBP/USD pair are relevant at this time, since a rebound from the Kijun-sen line was made. They are recommended to be kept with targets 1.2624 and 1.2748.