A number of experts say that the economic consequences associated with this pandemic will be comparable with the consequences of the Second World War. At this stage, I would consider this forecast as pessimistic, although it cannot be ruled out.
Let me remind you that the vast majority of companies are forced to quarantine and, as a result, dismiss or send some employees on unpaid leave. During the first week of quarantine in the USA the number of initial applications for unemployment benefits increased by 3.3 million, while the usual number averages around 200 thousand. Of course, this news put pressure on the USD
Additional pressure on the US currency was exerted by information about the government’s readiness to allocate more than $ 2 trillion of financial assistance for business and the US population. On Friday, March 27, Donald Trump signed the corresponding act for the allocation of the $ 2.2, which caused the USD index to fall back to levels seen in the middle of the month. All these factors and some others have caused the USD to fall by more than 5% in just a few days.
I’ll draw your attention to the GBP / USD currency pair, which has strengthened by almost 9% over the same period. This growth was due not only to a weakening USD, but also a fairly strong strengthening of GBP against most currencies, including JPY and EUR.
Now let's move on to the oil market. The first trading day of the week started with a gap down - the open price of the market was below the closing price on Friday by about $ 1 or 5%. The reason for the latest wave of sales was information that oil companies are running out of storage. At the same time, demand for oil from businesses and an increase in physical demand for raw materials is not expected to pick up in the nearest future so there is a risk of a further decline in black gold prices.
Nevertheless, it is not necessary to believe that the price of American WTI oil will remain at $ 20, As a result, with every dip it may be an opportunity to open a long position at a lower price. At the same time, traders choosing this strategy should take into account the risk of a short-term decline.