EUR / USD:
The Vice-President of the ECB Luis de Gindos stated that the banking sector of the Eurozone successfully coped with the consequences of COVID-19. From the point of view of capital and liquidity, banks were prepared much better than the crisis of 2008. The ECB was able to quickly change bank standards, which allowed bankers to increase the volume of lending to the European economy. This is a positive signal for the euro, since in recent months there were many conversations about the upcoming bank crisis of the eurozone. This time the ECB holds the situation under control. I note that I do not expect a strong ascending trend today. The downward trend in gold will have a negative impact on the euro, since the assets historically correlated with each other.
Investment idea: BUY 1.2010 / 1.1990 and Take Profit 1.2078.
GBP / USD:
The PMI Global Indicator for the Industrial Sector for Countries G-20 has reached 53.9% for the first time in the last three years, which signals the completion of the coronavirus crisis and the transition of the global economy from the recession to the growth phase. If you look at the structure of the PMI index, you can see a significant increase in the manufacturing industry, which is caused by an increase in factory orders. The growth of export orders is also gaining momentum. The growth of production facilities led to an increase in vacancies in this sector, which will allow to compensate for the labor market losses. In such periods on the US dollar, there is a serious pressure, since the dollar is a funding currency.
Investment idea: Buy 1.3850 / 1.3830 and Take Profit 1.3930.
USD / JPY:
ISM Institute pleased traders with strong statistics on business activity in the American industry. The indicator reached 60.8%, which became the maximum level since February 2018. This level of business activity contributes to GDP growth by 5%. All key indicators, such as new orders, export orders, employment, demonstrated confident growth. This is a positive signal for the American stock market, which is traded in 2% of the historic maximum and this week can establish a new record. Since this currency pair has historically correlates with the S & P500 index, the reduction in USD / JPY quotes should be used to open the BUY positions.
Investment idea: Buy 106.69 / 106.50 and Take Profit 107.06.
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