Logo

Posts

EUR/SUD forecast for May 2020.

April 30, 2020

April 30, 2020

Forex in May: Greenback is getting strongerDmitri Demidenko

It is too early to buy the EUR/USD, isn’t it?

The statistics provided by the governments is disappointing (for example, the data on the number of infected and died from the coronavirus). However, using statistics in Forex to build investment strategies is still rather efficient. The market situation in [April][1] has proved the trading systems based on the seasonal patterns of the G10 currencies to be successful. The sell positions on the [EUR/CAD][2], EUR/NOK, [USD/CAD][3], and the [USD/NOK][4] increased the deposit by 6.7%, and, if the trader had considered the quick rebound of the WTI after the crash below zero, the yield could have risen to 13%. Statistical analysis helps to identify the direction of price trends, but it is better to consider the entry points using technical and fundamental tools.

The best-performing currency in May, in 1975-2019, was most often the US dollar, whose major competitors usually were the safe-haven currencies, like the yen and the franc. This scenario is generally associated with a decline in the global risk appetite, as investors are betting on a drop in the global stock indexes. The chief outsiders in May usually were the EUR, GBP, and SEK, which closed in the red area in two cases out of three.

Periods of rise and fall

![LiteForex: EUR/SUD forecast for May 2020.][5]

Source: BoE, LiteForex analysis

In May, the U.S. dollar grew versus the Swedish krona and the euro by 0.9% on average, versus the pound, it was 0,7% up. In the periods when the greenback closed in the green area, it rose by 2.9% and 2.2% respectively. The best time for the USD/SEK bulls and the bears on the EUR/USD and the GBP/USD was 2010 when the U.S. economy was recovering from a recession and 2012 when the euro area suffered from the debt crisis. In those years, the European currencies were 7%-8% down in a month.

Averages and Medians

![LiteForex: EUR/SUD forecast for May 2020.][6]

Source: BoE, расчеты LiteForex

Dynamics of currencies in the periods of rise and fall

![LiteForex: EUR/SUD forecast for May 2020.][7]

Source: BoE, расчеты LiteForex

Of course, it is yet too early to expect the end of the US economic recession. The same is true for the potential repetition of the European debt crisis, which can’t be excluded amid the substantial increase in government spending and a decline in the tax revenues. Nonetheless, the 30% rally of the U.S. stock index up form the March lows amid a difficult epidemiological situation and the economic downturn, which is likely to be the worst since the Great Depression in the 1930s, looks like a bubble. Investors believe that the S&P 500 market will become bullish faster than the U.S. GDP will rebound. However, as the buyers of the US stocks understand that the GDP recovery may take quite a long time, they take profits, exiting longs.

Therefore, the global risk appetite will decline, and it will be relevant to sell the[ EUR/USD][8], [EUR/JPY][9], [GBP/USD][10], and [GBP/CHF][11]. The euro may fall even deeper unless the EU leaders find a compromise on the fiscal stimulus. A worse situation with Brexit will weigh on the GBP. The S&P 500 correction is the good news, first of all, for the U.S. dollar, while the yen and the franc will strengthen during the period of the US stock market’s stabilization.

P.S. Did you like my article? Share it in social networks: it will be the best “thank you” :)

Ask me questions and comment below. I’ll be glad to answer your questions and give necessary explanations.

Useful links:

  • I recommend trying to trade with a reliable broker [here][12]. The system allows you to trade by yourself or copy successful traders from all across the globe.
  • Use my promo-code BLOG for getting deposit bonus 50% on LiteForex platform. Just enter this code in the appropriate field while [depositing][13] your trading account.
  • Telegram channel with high-quality analytics, Forex reviews, training articles, and other useful things for traders

Price chart of EURUSD in real time mode

![Forex in May: Greenback is getting stronger][14]

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.

Rate this article:

{{value}}

( {{count}} {{title}} )

  1. www.liteforex.com/blog/analysts-opinions/forex-in-april-oil-is-leading-currencies-into-battle/
  2. my.liteforex.com/trading/chart?symbol=EURCAD&returnUrl=true
  3. my.liteforex.com/trading/chart?symbol=USDCAD&returnUrl=true
  4. my.liteforex.com/trading/chart?symbol=USDNOK&returnUrl=true
  5. cdn.liteforex.com/cache/uploads/blog_post/fundamental_analysis/stat1-30-04-20.jpg?w=30&s=e8223390e566e812e0b2b9e19660b837
  6. cdn.liteforex.com/cache/uploads/blog_post/fundamental_analysis/stat2-30-04-20.jpg?w=30&s=5b1f0c06163376f6c8bb9a0501fbed34
  7. cdn.liteforex.com/cache/uploads/blog_post/fundamental_analysis/stat3-30-04-20.jpg?w=30&s=6bfdf718d247449ace1d6d888f8bb18c
  8. my.liteforex.com/trading/chart?symbol=EURUSD&returnUrl=true
  9. my.liteforex.com/trading/chart?symbol=EURJPY&returnUrl=true
  10. my.liteforex.com/trading/chart?symbol=GBPUSD&returnUrl=true
  11. my.liteforex.com/trading/chart?symbol=GBPCHF&returnUrl=true
  12. my.liteforex.com/?category=analysts-opinions&slug=forex-in-may-greenback-is-getting-stronger&openPopup=%2Fregistration%2Fpopup&utm_source=blog&utm_medium=article&utm_campaign=bonus
  13. my.liteforex.com/deposit/?category=analysts-opinions&slug=forex-in-may-greenback-is-getting-stronger&promo_code=BLOG&utm_source=blog&utm_medium=article&utm_campaign=bonus
  14. cdn.liteforex.com/cache/uploads/blog_post/fundamental_analysis/liteforex-blog-forex-30-04-20.jpg?q=75&w=1000&s=c0be045f680152dda2040648d0104399