Forex And Cryptocurrency Forecast For May 10 - 14

Cryptocurrency, Business, Finance, Money, Wealth, Gold

First, a review of last week’s events:

EUR/USD

There has been a lot of talk for a long time about how quickly and how well the US economy is recovering. But the head of the Fed, Jerome Powell, warned a week ago that everything is still quite fragile, and the acceleration of inflation is a temporary factor. Apparently, he already knew it then, and now everyone else knows it too: not everything is as rosy as it seemed.

The bulk of US macroeconomic indicators released last week are colored red. The ISM business activity index in the manufacturing sector is 60.7 instead of 65.0 as was forecasted. The ADP report on the employment rate in the private sector is 742K instead of the forecasted 800K. The ISM business activity index in the services sector is 62.7 instead of 64.3. And it is a complete disaster with such an important indicator as the number of new jobs created outside the agricultural sector (NFP): 770K was created in March, 978K was expected in April, but only 266K were actually created, that is, 3.7 times less than the forecast.

Of course, investors had plenty of time to cash in on the recovery of the U.S. economy. And now it seems that the time has come to switch to other regions and, first of all, to the European Union. Moreover, vaccination against coronavirus in Europe is becoming more widespread, EU member states are gradually lifting quarantine restrictions, and the economy is gaining momentum. Unlike the US, retail sales in the Eurozone showed convincing growth, rising from minus 1.5% in March to plus 12.0% in April. And this is against the forecast of 9.6%.

The above has put strong pressure on the dollar and contributed to the strengthening of the European currency. As a result, the forecast given by the majority of experts (60%) came true 100%: the EUR/USD pair went up again and renewed the six-week high on the evening of Friday, May 07, reaching the height of 1.2170. This was followed by a slight rebound and a finish at 1.2165; 

GBP/USD

The forecast has turned out to be absolutely correct in this case as well. This pair has been moving in a side channel 1.3670-1.4000 for 10 weeks. And the majority of experts had voted for the fact that, having rebounded off the central zone of this corridor, the pair would go up and reach its upper border. This is what actually happened. Having started on Monday at 1.3810, the pair reached the height of 1.4000 on Friday, not far from where, at 1.3990, it finished the working week;

USD/JPY

When making a forecast for the past week, 70% of analysts had pointed to the south. In their opinion, the pair should have dropped below the horizon of 109.00, and the level of 108.40 was called as a support. And that is what happened. True, the bulls made an attempt to repeat the success of a week ago on Monday, but their strength dried up quickly. The pair turned down, reached the local bottom at 108.35 on Friday 07 May, and then put the last chord at 108.60;

Cryptocurrencies

"Bitcoin is disgusting and contrary to the interests of civilization", said Warren Buffett's fellow, 97-year-old billionaire Charles Munger. “Of course, I hate bitcoin's success. I do not welcome currency, which is created out of thin air and is so useful for kidnappers and extortionists,” Munger emphasized.

The 97-year-old investor is now likely be attributed not only to the “sharks” of Wall Street, but also to the “dinosaurs.” Virtual assets go beyond their perception of the world: after all, they are accustomed to dealing with currencies and securities, which have a very real, and not fictitious, basis. Nevertheless, the clink of digital gold is already heard in almost every financial centre on the planet. Financial data provider S&P Dow Jones Indices has even launched indices based on Bitcoin, Ethereum and on the basket with these cryptocurrencies. The S&P Bitcoin Index received the ticker SPBTC, the S&P Ethereum Index - SPETH, and the S&P Crypto Mega Cap Index which tracks the dynamics of these two assets, - SPCMC.

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Notice: These materials should not be deemed a recommendation for investment or guidance for working on financial markets: they are for informative purposes only. Trading on financial markets is ...

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