Overview of the EUR/USD pair. April 2. Donald Trump is expecting "two difficult and painful weeks" for the United States.

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - downward.

Lower linear regression channel: direction - downward.

Moving average (20; smoothed) - sideways.

CCI: -120.7428

The fourth trading day of the week begins with the continuation of the downward movement, which was initially identified as a correction. However, at the moment, the quotes of the EUR/USD pair are fixed below the moving average line, so the trend is changed to a downward one. The same can be said for the Ichimoku indicator system, where the price overcame the Kijun-sen line. Thus, now the movement can continue with the goal of the Murray level of "1/8"-1.0864 or lower. However, we already warned in yesterday's article that the current downward movement may be nothing more than a "correction against a correction". Thus, according to all the canons of the size of the corrective movement, it can end in the area of 1.0833-1.0893. If this hypothesis is correct, then the downward movement will not continue for long. Moreover, the movement to the south means the growth of the US currency. Yesterday, macroeconomic statistics supported the dollar. However, in addition to statistics, there is now a much more important "epidemic factor" in the world. And, according to the latest information, the United States is preparing for a very serious two weeks of fighting the "coronavirus". This, in fact, was stated by Donald Trump himself. "We are waiting for a very difficult two weeks, and then, I hope, as experts predict, we will see the light at the end of the tunnel, but it will be two very painful weeks," the American President said at a briefing at the White House. According to the latest data, about 190,000 people in the United States were infected, and according to scientists, the peak of the epidemic should not be expected earlier than two weeks. Thus, according to the most conservative estimates, given the current rate of increase in the spread of the epidemic, in two weeks there will be at least a million infected in America. However, as data from various medical studies and simulations of the possible situation show, in reality, everything can be much worse. CNN, for example, reports that the number of victims of the epidemic may be up to 2.2 million people, based on data received from all States. In the most optimistic scenario, this is 100-240 thousand people. The optimistic scenario, however, implies that the quarantine measures will be extended as long as necessary, and will be exactly observed by the Americans. "It is absolutely important for the American people to follow the instructions over the next 30 days. This is a matter of life and death," Donald Trump said. Over the past day in the United States, more than 800 people died from the COVID-2019 virus. At the same time, when Trump was making urgent messages for Americans, health officials continue to criticize the American President. In particular, doctors accuse Trump that he intentionally or not intentionally misled part of the US population, reassuring them with statements like the "coronavirus" is not a serious threat to the country and the virus will not survive the warm season of the year. For several months, which could have been spent on serious preparations for the epidemic, nothing was done, according to doctors. "It was clear to everyone that the situation was not under control, as Trump assured," health officials say. Experts from the Harvard Institute of Health do believe that tens of thousands of Americans will now die, although these deaths could have been prevented. Donald Trump himself seems to have realized that his country is not dealing with avian flu right now, so they are abruptly beginning to change their own rhetoric about the disease. According to the "new version", the US President knew very well that the epidemic is extremely contagious and can affect quite a large number of people. "I knew everything. I knew it could be terrible, but I knew it could be all right. And I don't want to be a pessimist in this situation," Trump said. However, according to the President, in the current situation, he did not want to deprive people of hope and optimism. Thus, now the US leader believes that the virus is extremely dangerous, after Easter, there is no question of any resumption of the economy, and all forces will be directed specifically to the fight against the "coronavirus". Many other politicians, unlike Trump, remain realistic. For example, the White House coordinator for the fight against the "coronavirus", Deborah Birx, believes that up to 200 thousand Americans may die due to the pandemic. Earlier, leading immunologists and virologists of the country have already called similar numbers of possible losses. But until the government representatives started talking about it, it seems that their opinion was not taken seriously.

On Thursday, April 1, there are not many macroeconomic statistics planned in the European Union and the United States. But a single report (on applications for unemployment benefits for the week before March 27) can become a "tub of ice water" for America, the US economy and the US dollar. Recall that the indicator of the week before last was equal to 3.3 million applications. Another 3.5 million applications for benefits are expected last week. If these forecasts come true, the demand for the US currency may fall sharply this afternoon. No more important reports are planned for today.

At the same time, the White House and the US Congress are preparing for a new project to help the economy. This time, we are talking about allocating an additional $2 trillion, which will be directed to roads, bridges, and tunnels in the United States.

From a technical point of view, it is difficult to say which way the currency pair will move in the long term. We still believe that the panic, if it has subsided a little, has not gone away for good. Volatility, although decreasing, remains quite high. Therefore, it is still difficult to expect reasonable and logical actions from the entire market. Moreover, if we understand the scale of economic damage in the United States approximately, thanks to the mass of published and voiced forecasts from competent persons, there is practically no information about the European Union. Obviously, the European economy will also decline, but how much? The latest data shows that in March, unemployment in Germany remained at the usual level of 5%, while business activity fell slightly in the manufacturing sectors and strongly in the services sectors. There is no more information about the European Union. Moreover, the European Central Bank or the European Parliament did not declare any programs to stimulate the economy, such as those already implemented by the Fed and the White House. Thus, it is not clear whether the situation in Europe is better (although, judging by the number of infected people, it is getting worse), or whether the ECB does not want to go the way of the United States, injecting trillions of euros into the economy.

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The volatility of the euro/dollar currency pair remains at high values, but it continues to decrease. The average value for April 2 is 153 points and in the last nine days, the volatility does not exceed the value of 200 points per day, and in the last three – 140 points. We believe that the markets continue to calm down and this is a good sign for traders. Today, we expect a further decrease in volatility and movement within the channel, limited by the levels of 1.0781 and 1.1087.

Nearest support levels:

S1 - 1.0864

S2 - 1.0742

S3 - 1.0620

Nearest resistance levels:

R1 - 1.0986

R2 - 1.1108

R3 - 1.1230

Trading recommendations:

The euro/dollar pair continues its downward movement. Thus, market participants are now recommended to consider selling the European currency with the targets of 1.0864 and 1.0781, since the bears overcame the moving average. It is recommended to buy the EUR/USD pair again only after the bulls are re-anchored above the moving average line with the first goal of 1.1087. When you open any position, it is still recommended to be more cautious as the situation on the market remains turbulent.

The material has been provided by InstaForex Company - www.instaforex.com