The single European currency stood still amid a completely empty macroeconomic calendar. Although this is not entirely true, since the single European currency was falling, the scale of the decline was rather symbolic. At the same time, such a sluggish movement, against an empty background, becomes another demonstration that the trend for strengthening the dollar is still maintained. Although, according to Kashkari, the worst is yet to come. And given that he represents the Federal Reserve, he spoke of course about the situation in the economy of the United States. And such encouraging statements clearly do not add to optimism. However, investors continue to assume that in other parts of the world, it will be at least as bad as in the United States. It's probably even worse. So the trend for strengthening the dollar is still maintained.
Today, the focus is on the final data on inflation in the United States, which should fall from 1.5% to 0.5%. In itself, the decline in inflation, and its approach to deflation, clearly pushes the Fed To take new stimulus measures. Especially if we remember Kashkari's words, as well as the fact that Friday's report of the United States Department of labor was the worst in history, and we have nothing else to do but compare the current crisis with the Great Depression, it is obvious that we should expect a strong and deep deflation. So yes, the Fed could even reduce the refinancing rate to negative values. At least, such steps can be discussed.
Inflation (United States):
From the point of view of technical analysis, we see low activity during which the quote managed to go down to the area of 1.0775, where a variable support was found near the control value.
In recent days, the quote shows special attention to the levels of 1.0775 and 1.0850, within which there is a fluctuation.
In terms of general consideration of the trading schedule, the daily period, a global downward trend is fixed, within which there is a series of consecutive cycles.
We can assume that trading forces are concentrated between the levels of 1.0775 and 1.0850 will continue to focus on the market participants, where the main goal is to resume the downward course, but for this, the quote needs to be consolidated below 1.0765/1.0775.
Specifying all of the above into trading signals:
- Buying positions are considered higher than 1.0820 towards 1.0845.
- We consider selling positions lower than 1.0765, towards 1.0700.
From the point of view of a comprehensive indicator analysis, we see a sell signal relative to hourly and daily periods. Minute intervals reflect a local rebound, signaling a purchase.
