Correlation between euro and gold | 27 April 2020

27 April 2020, EUR/USD

Correlation between euro and gold

EURUSD trading plan:

We are expecting an uptrend to develop. The first reason for the bullish trend is the positive dynamics of the interbank lending market. Rates on U.S. dollar loans are falling in the London interbank market, while interest rates on loans are rising in European currency. This is positive signal for euro, since excess dollar liquidity has a negative effect on the exchange rate of the U.S. dollar. The interest rate on a three-month loan in U.S. currency in London is 0.887%. This rate was 22.2 basis points higher a week ago. The second reason for the bullish trend is the rally in the precious metals market. European currency and gold are correlated.

Trading recommendation: Buy 1.0830 and take profit 1.0878.

David Johnson
Analyst of «FreshForex» company
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