16.00 Moscow time. USA: Fed Chairman Jerome Powell will deliver a speech.
Euro to dollar EURUSD forecast today 05/13/2020
The head of the US Federal Reserve today will deliver a speech for the first time after the meeting of the Federal Reserve on April 30. The day before, we received inflation data for April, where a decrease in the consumer price index to the level of 0.3% was recorded. The last time such low inflation was observed in October 2015. What will D. Powell talk about today? In my opinion, the head of the FOMC will point out the need to continue the program of quantitative easing and expand the balance of the Fed. Let me remind you that in March BlackRock, through which the bulk of FOMC operations goes, announced that the Fed's balance sheet could be expanded to $ 9 trillion. Now the figure is 6.72 trillion dollars. Over the past week, the balance has grown by $ 65 billion. If the Fed maintains this pace, then reaching the level of nine trillion dollars will take place at the beginning of next year.
EURUSD recommendation: Buy 1.0835 / 1.0815 and take profit 1.0885
Pound dollar forex forecast GBPUSD for today 05/13/2020
Today, a mixed background is forming. On the one hand, we can expect a drop in quotations against the background of negative dynamics in the credit market, where the yield on 10-year UK government bonds is declining compared to its counterparts from the USA and Germany. The profitability of the American decades has again become real, as inflation has fallen to the level of 0.3%, and the yield on securities is two times higher. In the UK this is not and British assets are of little interest to investors. On the other hand, we can expect a continuation of the upward trend in the oil market, which in turn may provide support to the pound, since the British currency correlates with black gold. The US Department of Energy reports a decrease in production, both this year and next. This is positive for the market, since it was American oil companies that were actively increasing oil production, what increased the imbalance in the market. On Tuesday, Chesapeake Energy, a US oil company operating in the oil shale industry, warned that the company's future was in jeopardy as a sharp drop in oil and natural gas prices significantly worsened its ability to service loans. Leaving the market of this company will also positively affect oil quotes in the short term.
GBPUSD recommendation: flat 1.2230 -1.2324
Forex forecast for the pair USDJPY today 05/13/2020
Quotation growth in the area of Monday maximum should be considered for opening Sell positions. The US dollar has little chance for sustainable growth. The world banking system now has a surplus of dollars. For example, the one-day loan rate on the interbank market in the United States is 0.05%, which is exactly two times lower than the Fed rate. On the interbank market in London, the rate is at the level of 0.06%, which is also lower than the benchmark of the Federal Reserve. For example, in March, the rate in London exceeded the Fed rate, since there were not enough dollars, and banks were forced to increase rates to get a loan. In the afternoon we will see a downtrend, since D. Powell, as part of his speech, will indicate the need to maintain low rates in the coming year. Why? Presidential elections will be held in the States in November 2020, and it’s very important for politicians to ensure economic growth, and without the help of the Fed, this will not work.
USDJPY recommendation: Sell 107.75 / 108.00 and take profit 107.25
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