Charts of the Week: Greenback under pressure following rate cut; USOIL set to resume downtrend

The US Dollar has come under renewed pressure after the Federal Reserve has announced it will cut the key interest rate to 0.00-0.25 % and boost its bond buying program. Those measures come as a response to the Coronavirus outbreak which continues to wreak havoc and has triggered fears that a global recession is inevitable.

Here are 3 charts to keep an eye on as we enter what is likely to be another highly volatile trading week:

XAUUSD has bounced off $1500 support and given the broad risk aversion in global markets, demand is likely to increase in the short-term. Immediate resistance is seen at the 38.2 % Fibo of the March decline, followed by the 50 % Fibo around $1604. Should XAUUSD break above the psychological resistance level of $1600 could trigger momentum buying, and help it recover towards $1650.

USOIL is unlikely to recover in the near-term. Demand is set to decline even further, while at the same time, OPEC members led by Saudi-Arabia are boosting production. Traders are keeping a close eye on the $30 support level. A clear break below could pave the way for a retracement towards the March 9 low around $27.30.

GBPUSD recovered slightly, and the next major level to watch to the upside is 1.2485. Should the currency pair overcome this hurdle, a short squeeze might follow pushing Cable towards the 200 DMA (currently around 1.27). To the downside, immediate support is seen at 1.2245/50, followed by the October ´19 low at 1.2190.

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