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EUR/USD: Bulls need a better-than-expected German IFO Expectations Figure

EUR/USD is looking to extend its two-day losing run on Monday amid the broad-based demand for the American dollar. Even gold, a classic safe-haven asset, is trading under pressure despite the lingering US-China concerns.

The currency pair is currently trading near 1.0888, representing marginal losses on the day, having declined by 0.27% and 0.45% on Thursday and Friday, respectively.

The dollar is in demand and growth-linked currencies like the AUD and CNH are struggling to gain ground due to the escalating US-China tensions. China’s foreign minister, on Sunday, accused Washington of damaging the relationship with Beijing and pushing the two nations toward a “new cold war”.

As a result, EUR/USD could continue to lose altitude in the short-term, more so, technical studies indicate scope for a drop to the lower end of the multi-week trading range of 1.0730-1.1020.

The single currency, however, will likely change course if the forward-looking German IFO Expectations Index (May), scheduled for release at 08:00 GMT, rises more-than-expected. The index is forecasted to tick higher to 75 from April’s reading of 69.4. Note that the forward-looking German ZEW survey of expectations rose to five-year highs in May. The final reading for Germany’s first-quarter GDP is also scheduled for release at 06:00 but is unlikely to have a big impact on the EUR pairs.

According to Trading Central (3rd party RIA) the EURUSD is short positions below 1.0990 with targets at 1.0725 & 1.0630 in extension.

* Past performance is not a guarantee of future performance

Number of Lots:Required Margin:Risk Management (50%):Potential Profit/Loss 1.0725
1€ 3,333.33€ 1,666.67€ 1,509.59
5€ 16,666.67€ 33,333.33€ 7,547.92
10€ 33,333.33€ 66,666.67€ 15,095.85
25€ 83,333.33€ 166,666.67€ 37,739.62
50€ 166,666.67€ 333,333.33€ 75,479.25

GBP/USD retraces three-day losses below 1.2200 on UK/US holiday

GBP/USD seesaws around 1.2180, up 0.05% on a day, during the pre-European session on Monday. In doing so, the Cable pair snaps the previous three-day losing streak on the day when the UK and the US markets are off for a holiday.

Even so, the US-China tussle over Hong Kong keeps the traders worried. As per the latest updates from NBC, the White House National Security Adviser Robert O’Brien cited the odds of levying sanctions on China and Hong Kong if Beijing moves ahead with a proposed national security law. Though US President Donald Trump is yet to embark upon the issue and hence traders await the Republican leaders’ response while catching a breath from the latest risk aversion wave.

On the other hand, UK PM Boris Johnson is accused of wrongdoing by Tory rebels as he favors Adviser Dominic Cummings despite breaking the coronavirus (COVID-19) code of conduct. Elsewhere, the Financial Times came out with the news indicating the Tory government’s efforts to bail out the big firms in the steel and aviation industry that are being hurt by the virus. Further, UK PM Johnson said, by the BBC, to announce the reopening of schools by June 01. In doing so, the Tory leader pays a little heed to the schools restart in Northern Ireland, Wales and Scotland that have a longer time to recall the students.

It’s worth mentioning that the UK government has recently stepped back from allowing to use Huawei’s 5G networks. The Sydney Morning Herald quotes a spokesperson for the British government who said, “Following the US announcement of additional sanctions against Huawei, the National Cyber Security Centre is looking carefully at any impact they could have on the UK’s networks.”

That said, the market’s risk-tone remains sluggish with the US stock futures flashing mild gains whereas the Asian equities register mixed moves.

Considering the lack of major data/events, the pair traders will keep eyes on the US-China drama for fresh direction.

According to Trading Central (3rd party RIA) the GBPUSD is short positions below 1.2440 with targets at 1.1950 & 1.1685 in extension.

* Past performance is not a guarantee of future performance

Number of Lots:Required Margin:Risk Management (50%):Potential Profit/Loss 1.1950
1€ 3,727.73€ 1,863.86€ 2,058.53
5€ 18,638.63€ 37,277.27€ 10,292.63
10€ 37,277.27€ 74,554.54€ 20,585.25
25€ 93,193.17€ 186,386.34€ 51,463.12
50€ 186,386.34€ 372,772.68€ 102,926.25

Oil drops 2%, but still posts fourth straight week of gains

Oil prices tumbled on Friday on rising U.S.-China tensions and doubts about how quickly fuel demand would recover from the coronavirus crisis.

Brent crude fell 93 cents, or 2.58%, to settle at $35.13 per barrel, after gaining nearly 1% on Thursday. West Texas Intermediate crude dropped 67 cents, or 1.98%, to settle at $33.25 per barrel, having gained more than 1% in the last session.

Brent and U.S. crude were set for 8% and 12% weekly gains, respectively, but some said they may have come too far, too fast.

According to Trading Central (3rd party RIA) the CRUDE is long positions above 25.50 with targets at 36.25 & 41.40 in extension.

* Past performance is not a guarantee of future performance

Number of Lots:Required Margin:Risk Management (50%):Potential Profit/Loss 36.25