The US dollar found support

June 15, 2020 11:00

Last week, the global reserve currency reversed its downward trend and recorded a moderate rise after the U.S. Federal Reserve meeting. Investors also returned to safe-haven currencies after negative sentiment prevailed in markets from Thursday, fearing a second wave of the virus and worries about the economic situation.


The data in the world's largest economy was mixed. The Redbook index, which shows consumer sentiment, recorded a drop of -9.7% compared to the same period a year ago, which suggests that the country is still feeling the effects of the virus and the population is spending less. The number of job vacancies fell from 6.0 to 5.0 million and still indicated a further deterioration in sentiment in the labour market. Inflation in the country fell to 0.1% per year, and after eliminating energy prices to 1.2%, indicating growing pressure on the Federal Reserve to avoid deflation. The number of new jobless claims was 1.5 million a week.

A meeting of the U.S. Federal Reserve was also held. Members see interest rates at 0% at least until 2022, and the quantitative stimulus program will continue at the current pace and will be increased as needed. The bank's economic forecasts were also published: unemployment will reach 9.3% in 2020, and the economy will shrink by -6.5%.

The situation of the coronavirus has deteriorated slightly, and most of the attention was directed to the U.S. At the end of the week, the number of new infections in the country began to grow rapidly and reached almost 30 thousand per day. The state of Texas has even begun to reintroduce quarantine to control the situation. In Brazil and Russia, the number of new infections remains stable, with India rising to fourth place, which is now experiencing a rapid rise in the number of cases.


The main currency pair EUR/USD tried to break through the resistance level of 1,140 at the beginning of the week, but failed and the pair fell to 1,125 on the last days of the week. Among the economic indicators was German exports, which fell by -24% in April compared to the same period a year ago. Italian industrial production fell -42% in April, during the very peak of the virus, compared to 2019. EUR/USD has ended the week depreciating -0.3%.


In the most important Asian pair, USD/JPY, sentiment has changed significantly and the pair has depreciated from a 2-month high and returned to the usual trading range. Economic data were scarce and included a change in industrial production prices, which fell to -2.7%, and suggested negative pressures on headline inflation in the coming months. USD/JPY ended the week with a fall of -2.0%.


The British pound largely reflected the trend in the U.S. dollar and capital flows between risky and safe-haven currencies, so the pair appreciated in the first half of the week and then depreciated. Among the data was the change in the country's economic results in April, when GDP contracted by as much as -24% compared to the same period a year ago. The volumes of industrial production decreased by -24.4%. GBP/USD has ended the week depreciating -1.0%.

Economic Events

This week will start with important economic data from China, where industrial production, retail trade and investment figures will be released. English labor market data and U.S. retail and industrial output results will be monitored on Tuesday. The Bank of Japan's decision on interest rates and changes in the country's export volumes in May is scheduled for Wednesday, and inflation rates in U.K. are expected on the same day. On Thursday, the focus will shift to a meeting of the Bank of England and its press conference. Retail sales results in U.K. are scheduled on Friday.

According to Admiral Markets market sentiment data, 29% of investors have long positions in the EUR/USD pair (down -1 percentage point from last week). In the main Asian pair USD/JPY, 65% of investors have long positions (up +36 percentage points). In the GBP/USD pair, 39% of participants expect a rise (down -6 percentage points). Such market data is interpreted as contraindicative, therefore EUR/USD and GBP/USD appreciation and USD/JPY depreciation are expected. The analysis of positioning data needs to be combined with fundamental projections and technical analysis.

Sources:,, Admiral Markets MT4 Supreme Edition,

Discover the world's #1 multi-asset platform

Admiral Markets offers professional traders the ability to trade with a custom, upgraded version of MetaTrader 5, allowing you to experience trading at a significantly higher, more rewarding level. Experience benefits such as the addition of the Market Heat Map, so you can compare various currency pairs to see which ones might be lucrative investments, access real-time trading data, and so much more. Click the banner below to start your FREE download of MT5 Supreme Edition!

Disclaimer: The given data provides additional information regarding all analysis, estimates, prognosis, forecasts or other similar assessments or information (hereinafter "Analysis") published on the website of Admiral Markets. Before making any investment decisions please pay close attention to the following:

  1. This is a marketing communication. The analysis is published for informative purposes only and are in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
  2. Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the Analysis.
  3. Each of the Analysis is prepared by an independent analyst (Jens Klatt, Professional Trader and Analyst, hereinafter "Author") based on the Author's personal estimations.
  4. To ensure that the interests of the clients would be protected and objectivity of the Analysis would not be damaged Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
  5. Whilst every reasonable effort is taken to ensure that all sources of the Analysis are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis. The presented figures refer that refer to any past performance is not a reliable indicator of future results.
  6. The contents of the Analysis should not be construed as an express or implied promise, guarantee or implication by Admiral Markets that the client shall profit from the strategies therein or that losses in connection therewith may or shall be limited.
  7. Any kind of previous or modeled performance of financial instruments indicated within the Publication should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
  8. The projections included in the Analysis may be subject to additional fees, taxes or other charges, depending on the subject of the Publication. The price list applicable to the services provided by Admiral Markets is publicly available from the website of Admiral Markets.
Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, you should make sure that you understand all the risks


Admirals An all-in-one solution for spending, investing, and managing your money

More than a broker, Admirals is a financial hub, offering a wide range of financial products and services. We make it possible to approach personal finance through an all-in-one solution for investing, spending, and managing money.