The USD corrected slightly yesterday, but remained near a 2-month high amid rising economic concerns and its growing reputation as a safe haven. The USD correction followed a rebound in the US stock market on hopes of new stimulus.

Democrats in the U.S. House of Representatives are working on a $2.2 trillion stimulus package that could be voted on next week. Democratic Speaker Nancy Pelosi has said she is ready to negotiate with the White House. Meanwhile, the Fed this week has spoken of the need for more fiscal stimulus amid investor concerns about the economic hit from the coronavirus pandemic.

Weak labor market data on Thursday underscored the need. The pound lost ground but remained above $1.27 after British finance minister Rishi Sunak announced a scheme to support new jobs but said unemployment would rise.

Sunak announced more support to save businesses and jobs, but said the UK government would support decent work. Meanwhile, gold prices turned positive from yesterday's 2-month low, thanks to the correction in the USD and the Fed's still dovish comments. The Fed reiterated its low interest rate policy until the labor market recovers or inflation rises to 2%.

Daily Pick

Today's prediction for the USD/JPY pair (UJ) is expected to rise, and the recommended order is BUY at the 105.600 level. The target profit is 10-20 points, with a stop loss at 5-10 points. Always prioritize Money Management and Risk Management.

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