Forex And Cryptocurrency Forecast For February 17 - 21, 2020

First, a review of last week’s events:

EUR/USD

Stop-loss orders on long positions for this pair are triggered one after another for the second week in a row. The bulls retreat, successively surrendering all their lines of defense. The pair has not just updated the lows of this and last years, it has reached the lowest values since May 2017. And the most interesting thing is that there is no one serious reason for such a collapse of the European currency. You can explain the collapse of the USD/CHF pair on "Black Thursday" in January 2015 or the fall of the pound following the referendum on the UK's exit from the EU. And here it seems that nothing extraordinary has happened.

Experts call a variety of possible reasons that in total could lead to the fact that the dollar has pushed the euro by 270 points over the past two weeks, and, practically, without corrections. Among them are the difference in the positions of the ECB and the Fed regarding the policy of easing (QE) and the value of interest rates, as well as concerns about a prolonged recession in the euro zone, caused by the gloomy macroeconomic indicators of the German and EU economies. Coronavirus did not have the last word, because, unlike the US, the European economy is more vulnerable to Chinese risks.

Traditionally, the dollar has been supported by a series of government bond offerings by the US Treasury. It is difficult to say which of these factors the experts surveyed had been guided by, but the forecast given by most of them was absolutely accurate. Recall that 60% of experts supported by graphical analysis on H4, 100% of trend indicators and 85% of oscillators were confident that the pair would continue to fall. The goal was to test the November-October 2019 lows around 1.0880. The test was successful, and the pair ended the five-day session at 1.0835;

GBP/USD

The British currency seemed to set out to prove to the British that their country's exit from the EU was absolutely correct. While the former European "counterpart" of the pound, the euro, was continuously falling, the British, on the contrary, was growing all the past week, adding almost 200 points and reaching at maximum the height of 1.3070.

Initially, after the unexpected resignation of Chancellor Sajid Javid, who disagreed with the personnel policy of Prime Minister Boris Johnson, the pound went down, but very quickly it turned around after Rishi Sunak became the new Head of the UK Finance Ministry - an experienced financier and, concurrently, the son-in-law of a billionaire. Tax cuts and increased budget spending, of which Sunak is an apologist, can seriously fuel interest in the British currency.

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