2020 Foreign Exchange forecast Easter Monday 13 April

covering USD Index, EUR/USD, GBP/USD, USD/JPY, GBP/EUR

USD Index	LT-M	MT-W	ST-D
99.53 (100.68)
Trend	↑ (↑)	↓ (↑)	↑ (↑)
% Risk Weight	54 (56)	60 (63)	43 (42)
Allocation	50% (50%)

Daily risk narrowly trending up. Weekly turned narrowly down and Monthly narrowly down still. As All major asset classes fare now entirely under central bank sovereign control, short term events, as directed by these same central banks, can turn risk upside down and vice versa the next day or week. The FX market as a whole will become harder to forecast which proves the case for our current hedge strategy. The Inxdex shows gaps up to 102.50 and down to 95.00. Surely they will both be filled over the coming month, although the upper end of this range had an outside set of gaps both going up and down around March 20. It looks like the dollar may settle more in the 97-100 range in coming weeks.

Previous 3 April: Every time frame is trending up although the MT Weekly shows potential bearish divergence. We stay on a central bank type risk approach keeping 50% cover. The dollar still looks vulnerable in spite of these continued upwards gyrations. No Change.

EUR/USD	LT-M	MT-W	ST-D
1.0925 (1.0794)
Trend	↑ (↓)	↓ (↓)	↓ (↓)
% Risk Weight	36 (33)	24 (32)	48 (42)
Allocation	50% (50%)

The Monthly trend turned mildly up at the beginning og this week, but the Weekly is shwowing a downtrend at a level that ingnites strong bullish divergence if this trend changes direction. As there are no strong signals at this moment like divergences between time frames this market is hard to predict. We continue to lean towards a weaker dollar but continued verbal and active manipulation of the FX markets anmd well as a very uncertain economic outlook makes our hedge proposal the safest option. No Change.

Previous 3 April: All time frames are down again in this tweet driven market. Similar to the Dollar index, the weekly timeframe may show bullish price to risk weight divergence of Euro trends back up again. In 5 weeks time the volatility has increased to levels not seen for a very long time. Up 6%, Down 8%, up 5% and down 4%. hence the cautious approach from a a price level that was the average since August last year. No Change.

GBP/USD (Cable)	LT-M	MT-W	ST-D
1.2485 (1.2250)
Trend	↓ (↓)	↑ (⇈)	↑ (↑)
% Risk Weight	55 (54)	50 (30)	95 (80)
Allocation	50% (50%)

GBP is trading at the highs of a 4 week range, holding its own in a market drawn by the health of Prime minister Boris Johnson, the reality of Brexit and the possible consideration of another postponement plus a major and later ingnition of the corona virus spread. Holding on to 50% cover is a low risk strategy. Hopefully within 4 to 6 weeks we can see light at the end of the tunnel and who knows what the world looks like at that time. No Change.

Previous 3 April: GBP remains more suspect between timeframes and the developing risk weight trends. But it is the same story reducing risk by keeping only half the transaction exposure covered.

USD/JPY	LT-M	MT-W	ST-D
107.95 (108.45)
Trend	↑ (↑)	↓ (↑)	↓ (↓)
% Risk Weight	50 (52)	64 (65)	30 (43)
Allocation	50% (50%)

Dollar yen, same story. Not a good time to speculate or develop very strong views on direction. Technically there is no clear signal available, NO divergences in individual timeframes or between time frames. Stochastic, MACD and RSI all middle of the road. Likely to stay in a 5% range until the market gets a better feel for world trade activity. No Change.

Previous 3 April: All major Dollar pairs show potential MT weekly price to risk weight bearish dollar divergence. International currency markets are behaving naively and with higher volatility across the board. It looks like we will stay on a very defensive approach for at a least a few more weeks. No Change.

---

GBP/EUR	LT-M	MT-W	ST-D
1.1430 (1.1340)
Trend	↓ (↓)	↑ (↑)	↓ (↑)
% Risk Weight	60 (60)	52 (30)	90 (90)
Allocation	80% (50%)

Change position to 80% cover on Long GBP transaction exposures. The down trend in Monthly time frame plus a continued overbought level of Daily calls for some action. There is clearly a much higher technical risk for a downward correction again following the rally that started on 19 March. Due to a generally lower expected trade volume the exposure should be covered from 50% to maximum 80% of budget risk right now.

Previous 3 April: Long GBP exposures to remain covered at 50%. Last weeks strong 5% rally looks nearly finished and an understandable reaction to the near 15% drop between mid Febr and mid March. The new economic reality makes is very possible that the UK has drawn a short Brexit straw, at least for the time being. No Change.