The world markets are now optimistic as the US and Europe are now believed to have passed the peak of the pandemic.
The US is already starting to show clear signs that it has already passed the peak of the coronavirus pandemic as its death toll has now lowered to 1500-1600 per day coming from a 2000 death toll in the previous days. Whereas Italy and Spain have passed both its peaks a little earlier.
The second reason for optimism is the large packages of economic support from the Fed, the US government, the EU, and Japan. However, this optimism will be cut due to the negative reports that lie ahead on the economy.
A report on China's GDP for the 1st quarter is expected on Friday. Note that China was able to stabilize its situation on the coronavirus pandemic during this quarter. Thus, we expect a fall in its GDP of approximately -9%.
Goldman Sachs gave a terrible forecast for the GDP of developed countries in the 2nd quarter with -35% in annual terms. This is 4 times worse compared to the 2008-09 financial crisis.
Now the main question is how the foreign exchange market will react?
The standard reaction in a crisis is going into the dollar.
EURUSD:
For now, you can consider purchases from 1.0930, but take a stop at 1.0840.
Sell from 1.0765.
