Indicator analysis. Daily review of GBP/USD on March 3, 2020

Trend analysis (Fig. 1).

Today, from the level of 1.2755 (closing yesterday's candle), an upward movement is possible with the target of 1.2871, a retracement level of 38.2% (red dashed line). If this level is reached, work down with the target at the lower fractal 1.2726.

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Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - up;

- Fibonacci levels - up;

- Volumes - up;

- Candlestick analysis - the top;

- Trend analysis - down;

- Bollinger Lines - up;

- Weekly schedule - down.

General conclusion:

Today, the price may roll back up, on a downward trend.

An unlikely scenario is from a pullback level of 23.6% equivalent to 1.2792 (red dotted line), work down with the target at the support line of 1.2663 (red bold line).

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Pullback will be temporary and markets expect a new wave of sales; NZD and AUD suffered more than others, so a corrective

The ISM manufacturing index declined in February to 50.1p from 50.9p a month earlier. The decrease is insignificant, but a number of indirect indicators increase the risk of a negative trend in the coming months.

New orders, export and processing were reduced, and deliveries of earlier orders made the largest positive contribution to the index. At the same time, there is an increase in the delivery time, that is, the positive contribution of this sub-index is based on a slowdown in the delivery time, which means the beginning of the destructive effect of the virus on the global chains of movement of raw materials, materials and components, and not on an increase in demand.

Given the strong correlation between ISM and Chinese PMI, which hit in February, it must be assumed that ISM will slow down at an accelerated pace in the coming months.

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Hence, we can conclude that the current recovery is temporary, the markets are just making a correction after a massive collapse and we need to wait for the next wave.

NZD/USD

The New Zealand dollar, along with the Australian currency, looks the most affected. The main reason is the strong orientation of trade turnover to China, so the slowdown in China is affecting these countries more than Europe.

ANZ Bank reports that, in its opinion, the RBNZ will reduce the rate in March by 0.5% and another 0.25% in May, after which the rate will decline to 0.25%. In fact, such a scenario means a gesture of despair, since after it only the measures of direct impact will remain available to the financial authorities of New Zealand - such as tax cuts, asset buybacks and targeted incentives.

But perhaps, ANZ is making the panic worse for nothing. According to the results of Friday's CFTC report, Kiwi increased its aggregate short position, but even in this case, the estimated fair price is significantly higher than the current one. Oversold will lead to a rapprochement between the estimated and spot prices sooner or later, but so far, panic determines everything.

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The high level of fair prices is explained by the fact that, despite the active stirring of the panic in the media, the sharp drop in T-bills yields, which began in January, is moving at different speeds for different countries. In particular, the spread between 10-year-old Treasures and similar securities in New Zealand is rapidly decreasing, and a decrease in the spread also means a decrease in the competitive advantage of US assets. Thus, this dynamics gives a chance to restore the kiwi.

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An attempt to gain a foothold below the support level of 0.62 failed. The Kiwi is consolidating, but it should go higher to the resistance zone 0.6370 / 80 for a second attempt. The resumption of decline without correction can occur only against the background of a large-scale resumption of panic sales, which requires a new unexpected news item.

AUD/USD

The RBA, following a meeting on Tuesday morning, lowered the discount rate from 0.75% to 0.50%. The decision was expected and did not lead to an increase in the volatility of the Australian dollar. In the accompanying statement, the lion's share of the comments was on the coronavirus. According to the RBA, "the decision was made to support the economy, as it responds to a global outbreak of coronavirus." Moreover, RBA also stated that it is expected that the Australian economy will return to a trend of improvement as soon as the coronavirus is localized.

It seems that all the problems of the Australian economy are associated exclusively with the virus. But is it? AiG reports that the index of activity in the manufacturing sector in February declined to 44.3p. This is a clear slowdown, but it was at 45.4p in January, despite the fact that the virus has not yet appeared. On the other hand, inflation in February decreased by 0.1% according to TD Securities, while building permits issued in January was by 11.3% less than a month earlier, and in annual terms the dynamics of the construction market was 11.3%.

Corporate Profit in Q4 2019 -3.5%, is actively declining. What does the virus have to do with it? One gets the impression that the virus is just a very convenient reason to start stimulation and try to mask the approach of the crisis, which without any virus is actively occurring.

The estimated Aussi price is much higher than the spot price, while according to the CFTC report, the short position has been actively increasing in the last week, and, strangely enough, it is still less than in December.

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Now, if we focus on the estimated price, then we must proceed from the fact that the active sale of Australian currency from last week was emotional. The AUD was oversold and corrective growth is likely. The goal is the resistance zone of 0.6660 / 80, but if the fair price decreases, then the upward correction will be low.

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Indicator analysis. Daily review of EUR/USD on March 3, 2020

On Monday, the pair continued to move upward, testing the historic resistance level of 1.1174 (blue dashed line). Today, strong calendar news for the euro is expected at 10:00 UTC. The price may continue to move up.

Trend analysis (Fig. 1).

The market may continue to move up today with the target at the upper fractal 1.1186 (blue dashed line). When the upper fractal is reached, the continuation of work upwards is with the target of 1.1239 (red dashed line).

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Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - up;

- Fibonacci levels - up;

- Volumes - up;

- Candlestick analysis - down;

- Trend analysis - up;

- Bollinger Lines - up;

- Weekly schedule - up.

General conclusion:

A continuation of the upward movement is expected today with the target of 1.1186 located at the upper fractal (blue dashed line).

An unlikely scenario is from the historical resistance level of 1.1174 (blue dashed line), work down with the target of 1.1090, the pullback level of 23.6% (blue dashed line). Upon reaching this level, the next lower target is 1.1031, the retracement level of 38.2% (blue dashed line).

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Trading plan for EUR/USD on March 3, 2020. To confirm the trend, the euro must reach 1.1250

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On Monday, the markets showed resistance against the coronavirus. The US stock market, as well as oil, rebounded sharply from the lows.

Update on the coronavirus: there are 90,000 cases worldwide. 80,000 of those are from China. Nevertheless, a sharp increase is still underway: in South Korea (4,300 patients), Italy (2000), and Iran (1,500).

In spite of that, there is no "new wave" of negativity yet.

News in the United States: the ISM industrial Index came out strong at 50.1.

EUR/USD: A new strong push upwards, which is a bid for an upward trend, happened on Monday. For a clearer signal, a break and consolidation above 1.1246 is needed.

Keep buying from 1.1100. Purchases from 1.1100 are also possible.

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Technical analysis of ETH/USD for 03/03/2020:

Crypto Industry News:

Jon Cuncliffe, deputy governor of the financial stability of the British central bank Bank of England (BoE), warned that the emergence of a cryptocurrency economy could weaken or eliminate the issuance of bank loans.

In a speech at the London School of Economics, Cunliffe predicted that the integration of stablecoins on social media platforms could lead to people putting most of their money currently stored in banks into crypto wallets, warning:

"In such a world, and depending on how and whether stablecoins have been secured by other financial assets, the supply of credit to the real economy through the banking system may weaken or even disappear. This would be a change with deep economic consequences."

Cunliffe also stated that virtual currencies pose very important questions to the UK government, regulators and the Bank of England. Cincliffe called on regulators and central banks to prepare for the unique challenges of the emerging cryptocurrency ecosystem before it becomes systemically important.

Technical Market Overview:

Ethereum stays below the short-term trendline resistance and is keeps trading in a narrow range located between the levels of $212.48 - $235.42. The downward momentum is decreasing, but is still weak and negative, so another wave down can occur soon. The next target for bears is seen at the level of $200 and below at $196.61.

Weekly Pivot Points:

WR3 - $315.76

WR2 - $294.92

WR1 - $247.66

Weekly Pivot - $227.96

WS1 - $180.28

WS2 - $159.27

WS3 - $113.10

Trading Recommendations:

The larger timeframe wave 2 corrective cycles are completed at the level of $115.05, so the market might be ready for another impulsive wave up of a higher degree and uptrend continuation. This strategy is valid as long as the level of $146.94 is not violated. The current move up might be a wave 3 in developing in the overall long-term Elliott wave scenario and so far the top at the level of $288.01 might be wave 1 of the overall wave 3.

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Technical analysis of BTC/USD for 03/03/2020:

Crypto Industry News:

Bitfinex, the 11th largest cryptocurrency exchange by daily trading volume, will remove dozens of trading pairs this week.

According to today's blog post, Bitfinex will remove 46 cryptographic pairs on Friday, March 6, due to low liquidity on the platform. The cryptocurrency market believes that removing trading pairs is a common measure that should improve liquidity on the Bitfinex platform.

Most trading pairs to be removed on Friday are altcoins paired with Ethereum, the second largest cryptocurrency in terms of market capitalization. The list includes about 30 trading pairs, including altcoins such as the OKEx token, Verge and Nucleus Vision.

Another 16 trading pairs involve trading in altcoins with Bitcoin, including Hydro Protocol and Medicalchain. Other trading pairs are OmiseGO / DAI, 0x / DAI and one trading pair with the Japanese yen XVG / JPY.

Bitfinex recommended users to cancel any open orders with the above trading pairs before March 6, emphasizing that all other open orders will be automatically canceled by the system.

According to current data, Bitfinex currently supports approximately 350 trading pairs on its platform. According to data from Coin360, Bitfinex's daily trading volume is around 118 million dollars.

Technical Market Overview:

All the Bitcoin bounces from the level of $8,405 level were very shallow. The local high was made at the level of $8,906, but it is still below the key short-term technical resistance located at $9,013. The downwards momentum is now decreasing, but is still weak and negative, so another wave down might happen any time now. The next target for bears is seen at the level of $8,000 and the key short-term technical resistance is seen at the level of $9,013.

Weekly Pivot Points:

WR3 - $10,789

WR2 - $10,332

WR1 - $9,212

Weekly Pivot - $8,808

WS1 - $7,687

WS2 - $7,218

WS3 - $6,064

Trading Recommendations:

The market might have made the first impulsive wave up of a higher degree. This strategy is valid as long as the level of $7,582 is not violated. Nevertheless, the larger timeframe trend is still down and all the shorter timeframe moves are still being treated as a counter-trend correction inside of the uptrend until the level of $10,433 is clearly broken.

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

Technical analysis of BTC/USD for 03/03/2020:

Crypto Industry News:

Bitfinex, the 11th largest cryptocurrency exchange by daily trading volume, will remove dozens of trading pairs this week.

According to today's blog post, Bitfinex will remove 46 cryptographic pairs on Friday, March 6, due to low liquidity on the platform. The cryptocurrency market believes that removing trading pairs is a common measure that should improve liquidity on the Bitfinex platform.

Most trading pairs to be removed on Friday are altcoins paired with Ethereum, the second largest cryptocurrency in terms of market capitalization. The list includes about 30 trading pairs, including altcoins such as the OKEx token, Verge and Nucleus Vision.

Another 16 trading pairs involve trading in altcoins with Bitcoin, including Hydro Protocol and Medicalchain. Other trading pairs are OmiseGO / DAI, 0x / DAI and one trading pair with the Japanese yen XVG / JPY.

Bitfinex recommended users to cancel any open orders with the above trading pairs before March 6, emphasizing that all other open orders will be automatically canceled by the system.

According to current data, Bitfinex currently supports approximately 350 trading pairs on its platform. According to data from Coin360, Bitfinex's daily trading volume is around 118 million dollars.

Technical Market Overview:

All the Bitcoin bounces from the level of $8,405 level were very shallow. The local high was made at the level of $8,906, but it is still below the key short-term technical resistance located at $9,013. The downwards momentum is now decreasing, but is still weak and negative, so another wave down might happen any time now. The next target for bears is seen at the level of $8,000 and the key short-term technical resistance is seen at the level of $9,013.

Weekly Pivot Points:

WR3 - $10,789

WR2 - $10,332

WR1 - $9,212

Weekly Pivot - $8,808

WS1 - $7,687

WS2 - $7,218

WS3 - $6,064

Trading Recommendations:

The market might have made the first impulsive wave up of a higher degree. This strategy is valid as long as the level of $7,582 is not violated. Nevertheless, the larger timeframe trend is still down and all the shorter timeframe moves are still being treated as a counter-trend correction inside of the uptrend until the level of $10,433 is clearly broken.

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Technical analysis of GBP/USD for 03/03/2020:

Technical Market Overview:

The GBP/USD pair has broken through the level of 1.2757 and made a new swing low at the level of 1.2725, but the market bounced quickly and the price got back to the middle of the range. This behavior might indicate increased bullish activity, so they are defending the key technical support levels. The bearish pressure intensifies as the next target for bears is seen at the level of 1.2747 and 1.2705. This would also mean the GBP/USD is again back to the wilder trading zone.

Weekly Pivot Points:

WR3 - 1.3239

WR2 - 1.3125

WR1 - 1.2954

Weekly Pivot - 1.2840

WS1 - 1.2657

WS2 - 1.2545

WS3 - 1.2353

Trading Recommendations:

The best strategy for current market conditions is to trade with the larger timeframe trend, which is up, so all downward market moves will be treated as local corrections in the uptrend. In order to reverse the trend from up to down in the longer term, the key level for bulls is seen at 1.2756 and it must be clearly violated. The key long-term technical support is seen at the level of 1.2231 - 1.2224 and the key long-term technical resistance is located at the level of 1.3512.

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Technical analysis of EUR/USD for 03/03/2020:

Technical Market Overview:

Despite the Bearish Engulfing candlestick pattern made at the level of 1.1040 the bulls have managed to make a new local high at the level of 1.1118. Another Bearish Engulfing has been made around this level and this time it might be more effective. The market conditions are now overbought despite the positive and strong momentum, so the downtrend might start to be continued any time soon.

Weekly Pivot Points:

WR3 - 1.1388

WR2 - 1.1223

WR1 - 1.1151

Weekly Pivot - 1.0973

WS1 - 1.0899

WS2 - 1.0724

WS3 - 1.0648

Trading Recommendations:

Despite the recent strong rally on EUR/USD the best strategy for current market conditions is the same as it was for last week: trade with the larger timeframe trend, which is down. All upward moves will be treated as local corrections in the downtrend. The downtrend is valid as long as it is terminated or the level of 1.1445 clearly violated. There is an Ending Diagonal price pattern visible on the larger timeframes like weekly, which indicates a possible downtrend termination soon. The key short-term levels are technical support at the level of 1.0778 and the technical resistance at the level of 1.1267.

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BCH/USD Price Movement For March 03, 2020

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After a breakout and close above 334.33 from the consolidation area (Cyan Rectangle) on the 4-hour chart, BCH/USD is now trying to retrace to the Optimal Trade Entry level (OTE) level at 317.92 before the price goes upwards to reach the Equal High at 401.57 (Buys Side Liquidity Pool). As long this cryptocurrency does not retrace downwards and closes below 298.31, it is likely to follow the upward trajectory, developing the overall bullish trend.

Disclaimer: Trading Forex on margin carries a high level of risk, and may not be suitable for all traders or investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

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GBP/USD: plan for the European session on March 3. Pound buyers need to work hard. Breakthrough at 1.2744 will provide a

To open long positions on GBP/USD you need:

Yesterday, buyers of the pound managed to form the lower boundary of the ascending channel in the region of 1.2760, and a larger support level moved to the area of 1.2744. It is from them that the further upward correction of the pound depends. If the bulls manage to hold these areas, the return to resistance of 1.2796, where the moving averages are now located, is not ruled out, which will be a signal to open long positions in the hope of updating the high of 1.2847, which is very necessary for pound buyers to support the current bullish correction. If the level 1.2744 is broken, then it is best to return to long positions only after a test of the lows 1.2707 and 1.2664, and the lower the better. Given that all movements will be impulsive in nature, any news on trade talks will lead to a surge in market volatility.

To open short positions on GBP/USD you need:

Yesterday's data on a slowdown in the UK manufacturing index put pressure on the pound, but today there is no important fundamental news on the UK, and the bears have the right to rely on a second test and a breakout of support at 1.2744, which will return the pair to a new downward trend and lead to an update of local lows around 1.2707 and 1.2664, where I recommend taking profits. Failure to consolidate above the resistance of 1.2796 with a rebound from moving averages will also be a good signal to open short positions. It is best to sell GBP/USD immediately for a rebound from a high of 1.2847 or even higher, after updating the resistance of 1.2891, with the aim of correction of 30-40 points, after which it is better to close short positions within the day.

Signals of indicators:

Moving averages

Trading is slightly lower than 30 and 50 moving average, which saves the likelihood of continued downward correction.

Bollinger bands

A break of the upper boundary of the indicator at 1.2796 will lead to an upward correction of the pound. A break of the lower boundary at 1.2744 will raise the pressure on the pair.

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Description of indicators

  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
  • MACD indicator (Moving Average Convergence / Divergence - moving average convergence / divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
  • Bollinger Bands (Bollinger Bands). Period 20
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EUR/USD: plan for the European session on March 3. Be careful with buying the euro at current highs. Bulls aim for 12th figure

To open long positions on EURUSD you need:

The euro continued to grow yesterday and has gained more than 300 points over the past few trading days, which is a lot for this pair. Buyers took advantage of bad data on the US economy yesterday, as if they were worse than in the eurozone, and continued to push the euro up. Today, the emphasis will be shifted to the inflation report in the eurozone, which does not reach the target value of the European Central Bank. The bulls will expect to consolidate above the resistance of 1.1165, which may lead to an update of yesterday's high and a test level of 1.1203. Farther targets will be areas 1.1239 and 1.1263, where I recommend taking profits. However, it is best to return to long positions with the correction of EUR/USD to the area of 1.1123, with the formation of a false breakout there, or buy from larger lows in the areas of 1.1084 and 1.1042.

To open short positions on EURUSD you need:

The task of sellers today is to prevent the breakout of resistance at 1.1165 and the formation of a false breakout on it. However, if this does not happen, you can count on the formation of divergence on the MACD indicator after a test of high1.1203, which will be an additional signal to open short positions. Farther levels for selling are visible in the areas of 1.1239 and 1.1263, but you can count on them to rebound no more than 20-30 points inside the day. An equally important task for the bears will be the return of EUR/USD to the support level of 1.1123, which could lead to the demolition of a number of stop orders of buyers and the downward correction of the euro to the lows of 1.1084 and 1.1042, where I recommend taking profits. Weak eurozone inflation data may help sellers.

Signals of indicators:

Moving averages

Trading is conducted above 30 and 50 moving averages, which indicates the likelihood of further upward correction of the euro. With a decrease in the pair, the moving averages will also act as support.

Bollinger bands

Growth will be limited by the upper indicator level at 1.1185, while the lower boundary in the area of 1.1084 will support.

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Description of indicators

  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
  • MACD indicator (Moving Average Convergence / Divergence - moving average convergence / divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
  • Bollinger Bands (Bollinger Bands). Period 20
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XAU/USD price movement for March 03, 2020

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After XAU/USD has touched 1579.15, it is trading again in the bullish channel. It is trying to head to 1610.57 as its prime target and 1624.63 as its secondary target. As long as XAU/USD does not retrace to 1547.07, the overall bias for XAU/USD will still be bullish.

(Disclaimer)

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Overview of the GBP/USD pair. March 3. The pound is dependent on the speeches of the top officials of the United States and

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) - down.

CCI: -129.2733

The British pound ended the first trading day of the week with completely opposite movements between the Murray levels of "1/8" and "2/8", which is clearly visible from the illustration above. Thus, the correction has really begun, although it does not look quite clear. The Heiken Ashi indicator alternates between purple and blue bars and each of them is quite impressive in size. However, now the Murray level of "1/8" can be considered a local minimum that bears need to overcome in order to continue the downward movement. On Monday, March 2, only one report was published in the UK and two in the United States. On Tuesday, March 3, no reports will be published either in the United States or in the UK. Thus, the macroeconomic background will be completely empty for the pound/dollar pair. Of course, there is some hope for the fundamental background - namely the speech of Fed member Loretta Meister, the unexpected speech of Boris Johnson, Jerome Powell, Mark Carney, Michel Barnier or David Frost. After all, negotiations on a deal with the European Union have officially begun, the world is raging epidemic of "coronavirus", and the world's largest central banks are preparing to reduce rates. Thus, comments from top officials may well come in an unplanned way. If nothing interesting is presented to us today and the fundamental background, then volatility may remain low, and the downward movement is unlikely to resume.

Meanwhile, some information from the negotiations has already started to arrive. However, now it is frankly secondary in nature. David McCallister, President of the European Parliament's Foreign Affairs Committee, said yesterday: "Negotiations with London have begun today and we are entering a critical phase that will set the tone for the future relationship between the EU and the UK. Mutual trust and respect must prevail in negotiations so that the parties can reach the best solution. Michel Barnier and his team can count on the full support of the European Parliament." Mr. McCallister also recalled that the European Parliament adopted a resolution according to which the negotiating group should do everything possible to protect the interests of European citizens and European businesses.

From a technical point of view, a correction is now taking place. Volatility on Monday returned to the usual value of about 100 points per day. The downward trend continues (both channels of linear regression are directed downward). However, to continue the downward movement, you need to confidently overcome the level of 1.2756. On Wednesday, a number of important economic data will be published, so it is possible that this overcoming will happen the day after tomorrow.

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The average volatility of the pound/dollar pair over the past 5 days is 121 points. However, if we consider the last abnormal Friday, this figure does not exceed 90 points. Thus, Friday's 200 points can not be considered a pattern. Thus, on Tuesday, we expect the pair to move within the volatility channel of 1.2647-1.2889.

Nearest support levels:

S1 - 1.2756

S2 - 1.2695

S3 - 1.2634

Nearest resistance levels:

R1 - 1.2817

R2 - 1.2878

R3 - 1.2939

Trading recommendations:

The GBP/USD pair started a correction after an unsuccessful attempt to overcome the level of 1.2756. Thus, it is still recommended to sell the pound with the targets of 1.2695 and 1.2647 if this level is overcome or the Heiken ASHI indicator turns down. You can buy the British currency with the targets of 1.2939 and 1.3000, but in small lots, if traders fix the pair above the moving average line.

In addition to the technical picture, you should also take into account the fundamental data and the time of their release.

Explanation of the illustrations:

The highest linear regression channel is the blue unidirectional lines.

The lowest linear regression channel is the purple unidirectional lines.

CCI - blue line in the indicator window.

Moving average (20; smoothed) - blue line on the price chart.

Murray levels - multi-colored horizontal stripes.

Heiken Ashi is an indicator that colors bars in blue or purple.

Possible variants of the price movement:

Red and green arrows.

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Overview of the EUR/USD pair. March 3. New speech by Luis de Guindos and data on inflation in the European Union

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) - up.

CCI: 169.0755

The second trading day of the week begins with the same strong upward movement that was observed on Monday and throughout the past week. It is difficult to even imagine what can stop buyers of the euro. As we have already seen in the final articles for March 2, the growth of the European currency can not be called special and logical now. And especially strong growth. Thus, we believe that the markets are just in a panic and only for some instruments. For example, the GBP/USD pair feels calm and trades quite logically. Thus, it is recommended that the euro remain in the longs until it receives a signal about the beginning of a downward correction, which is likely to be a signal about the end of the upward trend. All macroeconomic events that will be available to traders this week can be ignored. Such a strong movement could not be provoked by banal reports. Thus, any other reports may not provoke any market reaction. However, you should not lose sight of important statistics and important fundamental events. At the very least, they will help to predict the movement of the currency pair when the panic mood leaves the market.

For example, today, on March 3, there will be another speech by the Vice-President of the European Central Bank, Luis de Guindos, who yesterday hinted that the Regulator will do everything necessary to ensure that inflation continues to strive for its target level, which now remains at the level of 2.0%. The ECB has not been able to reach this level for 7 or 8 years, so de Guindos's words are likely to have a figurative meaning. First, the Vice President started talking about monetary policy at a time when the risks of a global economic slowdown due to the "coronavirus" have increased many times. Secondly, it was at the time when Jerome Powell and Mark Carney made similar statements. Third, if the ECB had been so important for inflation at 2%, the rate would have been cut again a long time ago. Thus, the conclusion is that the ECB is not afraid of weak inflation at this time, but of an even greater slowdown in the European economy, which is already on the verge of recession.

Also scheduled for today is the speech of the head of the Cleveland Fed, Loretta Meister, who can speak about the Fed's monetary policy next to Jerome Powell. Recall that the more members of the monetary committee will vote "for" easing the policy, the more likely it is to see a rate cut in March. Thus, each speech by a member of the Fed's monetary committee now receives an additional degree of significance.

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Well, in addition to the speeches of high-ranking officials, today the European Union will publish data on inflation. Although we believe that traders are highly likely to ignore any value of the consumer price index, it is impossible to avoid such a publication. Core inflation in the EU in February should be 1.1%-1.2% y/y. That is, according to experts, we should expect an acceleration of 0.1%. Recall that core inflation does not take into account changes in food and energy prices, so it is considered more accurate.

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It will be followed by the main inflation indicator for February, which may fall to 1.2%-1.3% y/y from the current 1.4% y/y. Thus, it is highly likely that macroeconomic statistics will disappoint buyers of the euro. However, as we have already said, it is unlikely that such a strong movement will be broken by a single inflation report, whatever it may be. The most interesting thing is that it is almost impossible to predict when and why the euro/dollar pair will end its trip to the north. Most likely, the pair will start falling after reaching a certain level, where large pending sell orders or Take Profit orders are located. While the upward movement continues, as indicated by the Heiken Ashi indicator, we recommend that traders continue to stay "in the trend".

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The average volatility of the euro/dollar currency pair rose to 100 points per day, which is a very high value for the euro. Thus, on the second trading day of the week, we again expect a decrease in volatility and movement within the channel, limited by the levels of 1.1056 and 1.1256. A downward turn of the Heiken Ashi indicator will indicate a turn of the long-awaited corrective movement.

Nearest support levels:

S1 - 1.1108

S2 - 1.1047

S3 - 1.0986

Nearest resistance levels:

R1 - 1.1169

R2 - 1.1230

R3 - 1.1292

Trading recommendations:

The euro/dollar pair continues its strongest upward movement so far. Thus, purchases of the European currency with the targets of 1.1230 and 1.1256 remain relevant now, until the Heiken Ashi indicator turns down. You will not be able to return to sell positions until the price is fixed below the moving average line with the first targets of 1.0925 and 1.0864, which is not expected in the near future, for obvious reasons.

In addition to the technical picture, you should also take into account the fundamental data and the time of their release.

Explanation of the illustrations:

The highest linear regression channel is the blue unidirectional lines.

The lowest linear regression channel is the purple unidirectional lines.

CCI - blue line in the indicator window.

Moving average (20; smoothed) - blue line on the price chart.

Murray levels - multi-colored horizontal stripes.

Heiken Ashi is an indicator that colors bars in blue or purple.

Possible variants of the price movement:

Red and green arrows.

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

Forecast for EUR/USD on March 3, 2020

EUR/USD

The euro grew by 107 points on Monday, the highest growth of the day was 160 points. Euro purchases were at their highest daily volumes in the last 13 months. Such a rush is possible on only one idea - to be certain that the Fed will lower the rate by 0.5% in March. We are still not sure about this. The Fed may be proactive, but only if there are signs of economic failure, they are not there yet. The stock market crash of 12.75% between February 20 and 28 is far from a sign of economic drawdown; on the contrary, it is useful for the economy with the goal of reorganizing it from plankton - various firms that tighten business chains. Pension funds, insurance companies, regional budgets can be hit, all those who, by law, are obliged to place reserves in financial markets. But here, large investors withdrew money from the stock market throughout the past year, transferring funds to less risky instruments. Indeed, the yield on 10-year US bonds last year steadily declined, under the influence of debt purchases, the yield fell from 1.921% to the current 1.145%. Last year, the main buyers of US Treasury bonds were domestic investors. For a one-time reduction of the base rate by 0.5%, there must be a very good reason, for example, the bankruptcy of a large bank. Over the past week, the euro has grown by 350 points and this is enough to absorb one rate cut by 0.25%.

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The euro reached the target level of 1.1175, the Marlin oscillator entered the overbought zone and showed the first sign of a reversal. Now we are waiting for, if not a price reversal down, then a correction, the purpose of which will be to support the MACD line at 1.1035.

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The signal line of the Marlin oscillator returned to the consolidation range on the four-hour chart, there are no other signs of a reversal. It remains to wait.

The Reserve Bank of Australia makes a decision on the rate today at 2:30 London time. A decrease is expected from 0.75% to 0.50%. If the euro's reaction to this decrease is negative, that is, there will be no price increase, then this will become an indirect sign of the completion of the expected reduction in the rate and the Fed itself.

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

Forecast for GBP/USD on March 3, 2020

GBP/USD

The quote of the British pound remained at the Fibonacci level of 123.6% for two days. Investors are waiting for news from the negotiations of the British delegation with European politicians. The current stage of negotiations will end on Thursday. Consolidating the price under yesterday's low opens the target at the Fibonacci level of 138.2% at the price of 1.2670. The second target is 161.8% at 1.2530. It is also possible to continue trading in the range, then the price can once again be marked at the Fibonacci level of 110.0% (1.2844).

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On the four-hour chart, the signal line of the Marlin oscillator is moving up, which may be a warning of another local increase before the medium-term decrease (potential, expected). Here, the resistance is the MACD line, which moves to the Fibonacci level of 110.0%. The Marlin oscillator by this time will reach the boundary with the growth territory and will turn down from it.

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

Forecast for AUD/USD on March 3, 2020

AUD/USD

The Australian dollar fulfilled the target of 0.6457 on Friday, then returned to the range of Fibonacci levels of 261.8-271.0%, and now it shows its intention to move once again to the level reached and overcome it. The intention to fall to the 0.6370 target in terms of the Fibonacci level of 361.8%, we see in the signal line of the Marlin oscillator that is extremely compressed into a wedge.

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The RBA makes a decision on the rate today at 2:30 London time. Investors expect a drop from 0.75% to 0.50% as a support to the economy after losses in the extremely hot Australian summer. Also, losses due to disruptions in trade relations with China.

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The price is developing under the lines of balance (indicator red) and MACD (indicator blue) on a four-hour chart, the Marlin oscillator in the territory of the bears. We are waiting for the decision of the RBA and the Australian dollar to fall in the main scenario. In an alternative scenario, the price may rise in the 0.6580-0.6600 range - to the Fibonacci level of 238.2% at the point of intersection with the embedded lines of the price channel (daily).

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

Fractal analysis of the main currency pairs for March 3

Forecast for March 3:

Analytical review of currency pairs on the scale of H1:

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For the euro / dollar pair, the key levels on the H1 scale are: 1.1322, 1.1268, 1.1242, 1.1196, 1.1116, 1.1083 and 1.1029. Here, we are following the local upward cycle of February 28. The continuation of the movement to the top is expected after the breakdown of the level of 1.1196. In this case, the target is 1.1242. Price consolidation is in the range of 1.1242 - 1.1268. For the potential value for the top, we consider the level of 1.1322. Upon reaching this level, we expect a pullback to the bottom.

Short-term downward movement is expected in the range 1.1116 - 1.1083. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 1.1029. This level is a key support for the top, its passage at the price will lead to the formation of initial conditions for the downward cycle.

The main trend is the local upward cycle of February 28

Trading recommendations:

Buy: 1.1196 Take profit: 1.1242

Buy: 1.1268 Take profit: 1.1320

Sell: 1.1116 Take profit: 1.1084

Sell: 1.1081 Take profit: 1.1030

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For the pound / dollar pair, the key levels on the H1 scale are: 1.2866, 1.2827, 1.2795, 1.2717, 1.2689 and 1.2631. Here, we are following the development of the downward cycle of February 25. Short-term movement to the bottom is expected in the range of 1.2717 - 1.2689. The breakdown of the last value will lead to movement to a potential target - 1.2631, when this level is reached, we expect a pullback to the top.

Short-term upward movement is possibly in the range of 1.2795 - 1.2827. The breakdown of the latter value will lead to an in-depth correction. Here, the target is 1.2866. This level is a key support for the downward movement.

The main trend is the downward cycle of February 25.

Trading recommendations:

Buy: 1.2795 Take profit: 1.2825

Buy: 1.2828 Take profit: 1.2864

Sell: 1.2717 Take profit: 1.2690

Sell: 1.2686 Take profit: 1.2634

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For the dollar / franc pair, the key levels on the H1 scale are: 0.9655, 0.9622, 0.9598, 0.9553 and 0.9518. Here, the price is near the limit values for the descending cycle of February 20. In connection with which, we expect a correction. Short-term upward movement is possibly in the range of 0.9598 - 0.9622. The breakdown of the latter value will lead to in-depth movement. Here, the target is 0.9655. This level is a key support for the downward structure.

Short-term downward movement is possibly in the range of 0.9553 - 0.9518. From here, we expect a key reversal to the top.

The main trend is a downward cycle of February 20, we expect a correction

Trading recommendations:

Buy : 0.9598 Take profit: 0.9621

Buy : 0.9624 Take profit: 0.9653

Sell: 0.9551 Take profit: 0.9520

Sell: Take profit:

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For the dollar / yen pair, the key levels on the scale are : 109.62, 108.92, 108.54, 107.33 and 106.48. Here, we are following the development of the downward cycle of February 21. The continuation of movement to the bottom is expected after the breakdown of the level of 107.33. Here, the potential target is 106.48. We expect a pullback to the top from this level.

Short-term upward movement is possibly in the range of 108.54 - 108.92. The breakdown of the last value will lead to an in-depth correction. In this case, the target is 109.62. This level is a key support for the downward structure.

The main trend: the downward cycle of February 21

Trading recommendations:

Buy: 108.54 Take profit: 108.90

Buy : 108.94 Take profit: 109.60

Sell: 107.30 Take profit: 106.55

Sell: Take profit:

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For the Canadian dollar / US dollar pair, the key levels on the H1 scale are: 1.3409, 1.3373, 1.3350, 1.3308, 1.3282, 1.3262, 1.3224 and 1.3201. Here, we are following the formation of the descending structure of February 28. The continuation of the movement to the bottom is expected after the breakdown of the level of 1.3308. In this case, the target is 1.3282. Price consolidation is near this level. The passage at the price of the noise range 1.3282 - 1.3262 should be accompanied by a pronounced downward movement. Here, the target is 1.3224. For the potential value for the bottom, we consider the level of 1.3201. Upon reaching which, we expect consolidation, as well as a rollback to the top.

Short-term upward movement is possibly in the range of 1.3350 - 1.3373. The breakdown of the latter value will lead to in-depth movement. Here, the target is 1.3409. This level is a key support for the downward structure.

The main trend is the formation of the downward structure of February 28

Trading recommendations:

Buy: 1.3350 Take profit: 1.3371

Buy : 1.3375 Take profit: 1.3409

Sell: 1.3308 Take profit: 1.3282

Sell: 1.3260 Take profit: 1.3225

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For the Australian dollar / US dollar pair, the key levels on the H1 scale are : 0.6637, 0.6602, 0.6588, 0.6571, 0.6551, 0.6518, 0.6501, 0.6480 and 0.6468. Here, we are following the formation of the initial conditions for the top of February 28. The continuation of the movement to the top is expected after the breakdown of the level of 0.6551. In this case, the target is 0.6571. The breakdown of this value will allow us to expect movement to 0.6588. Price consolidation is near this level. Meanwhile, passing by the price of the noise range 0.6588 - 0.6602 will lead to the development of pronounced movement. Here, the target is 0.6637. For the potential value for the top, we consider the level of 0.6663, from which we expect a pullback to the bottom.

Short-term downward movement is possibly in the range of 0.6518 - 0.6501. The breakdown of the latter value will lead to the formation of a local descending structure. In this case, the target is 0.6480.

The main trend is the formation of initial conditions for the top of February 28

Trading recommendations:

Buy: 0.6551 Take profit: 0.6570

Buy: 0.6572 Take profit: 0.6586

Sell : 0.6518 Take profit : 0.6503

Sell: 0.6500 Take profit: 0.6482

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For the euro / yen pair, the key levels on the H1 scale are: 122.07, 121.61, 121.36, 120.92, 120.23, 119.95 and 119.54. Here, we are following the formation of the initial conditions for the top of February 28. The continuation of the movement to the top is expected after the breakdown of the level of 120.92. In this case, the target is 121.36. Price consolidation is in the range of 121.36 - 121.61. For the potential value for the top, we consider the level of 122.07, upon reaching which, we expect a pullback to the bottom.

Short-term downward movement is possibly in the range of 120.36 - 119.95. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 119.54. This level is a key support for the upward structure.

The main trend is the formation of initial conditions for the top of February 28

Trading recommendations:

Buy: 120.92 Take profit: 121.36

Buy: 121.62 Take profit: 122.07

Sell: 120.23 Take profit: 119.95

Sell: 119.93 Take profit: 119.55

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For the pound / yen pair, the key levels on the H1 scale are : 140.18, 139.34, 138.82, 137.44, 136.91 and 136.11. Here, we are following the downward cycle of February 21. Short-term downward movement is possibly in the range of 137.44 - 136.91. The breakdown of the latter value will allow us to count on movement to a potential target - 136.11. We expect a pullback to the top from this level.

Short-term upward movement is possibly in the range of 138.82 - 139.34. The breakdown of the latter value will lead to the development of an in-depth correction. Here, the goal is 140.18. This level is a key support for the downward cycle.

The main trend is the downward cycle of February 21.

Trading recommendations:

Buy: 138.82 Take profit: 139.30

Buy: 139.38 Take profit: 140.18

Sell: 137.44 Take profit: 136.94

Sell: 136.88 Take profit: 136.15

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

GBP/USD. Results of March 2. Pound remains calm amid start of negotiations between the delegations of Michel Barnier and

4-hour timeframe

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Amplitude of the last 5 days (high-low): 68p - 104p - 108p - 87p - 194p.

Average volatility over the past 5 days: 113p (high).

The British pound spent the first trading day of the week as it should be. Firstly, there were no abrupt and unreasonable movements. Secondly, the British pound traders clearly worked out macroeconomic statistics. Thirdly, there was no panic. And most importantly, what needs to be said right away: the euro currency did not move today on the basis of macroeconomic data. Trading on the pound/dollar pair proved ot. However, first things first. In general, today perfectly fits the definition of correctional Monday. There were few important posts today. Therefore, the volatility remained not too high. We spoke about indexes of business activity in the US manufacturing sector, Markit and ISM, in the article on the euro. In the UK, the index of business activity in the manufacturing sector was slightly lower than experts' forecasts and amounted to 51.7. It was this publication that provoked a slight drop in the British currency in the European trading session. After lunch, when it became known about business activity in the US manufacturing sector, the quotes of the pair rushed up, working out already weak statistics from across the ocean. As a result, everything is logical and reasonable.

In the meantime, delegations of Michel Barnier and David Frost have officially begun negotiations on a trade deal that provides for a turnover of 500 billion euros annually. The first round of negotiations is expected to last three days. The next round of negotiations will also take place in March, each subsequent one will take place in two to three weeks. Both sides express a desire to conclude a trade deal before the end of 2021. It is noted that the European side wants to provide Britain with access to a single market without duties and quotas, but they want to receive guarantees in return that the British government will prevent dumping and ensure fair competition for British and European companies. The European Union also wants to gain access to fishing in British waters. In turn, London wants to completely get out of the jurisdiction of the European Union, not to submit to the European Court. Negotiations have begun, and in the near future we can get the first information on this topic.

We, as before, believe that the probability of a trade deal within the next 3-4 months is extremely low. It is 3-4 months, not ten, since Boris Johnson has already stated that if it is not clear that the deal has prospects before mid-summer, the British delegation will leave the negotiations with the Europeans. Thus, this is not even a year of talks, but just a few months. What are the chances that a huge deal will be agreed in such a short time? The British pound will be, as they say, keep abreast of the negotiations, being in a ready mode at any moment to fall if information is received that the parties cannot come to a common denominator. In recent days, the downward trend seems to have resumed, but so far it cannot be said that it is confident.

We would also like to mention the speeches of Mark Carney and Jerome Powell. Recall that both central bank chairmen said they would respond if necessary to the consequences of the coronavirus epidemic, which, according to Carney, is already negatively affecting the British economy. But his American counterpart also stated high risks of a slowdown in the economy due to the Chinese virus and hinted that the Fed would cut the rate in the near future. In fact, the British pound did not react to any one or the other statement, because they offset each other. Thus, now we can expect a softening of both the British monetary policy and the US one, which will not change the balance of power between the currencies, unless the Fed reduces the rate immediately by 0.5%. Only such a step can provide the British currency with more or less long-term support.

From a technical point of view, the pound/dollar has now begun to adjust, which again is logical after Friday's drop in quoted. The MACD indicator has not yet managed to turn up, but will do so soon. Thus, we recommend now waiting for news from the UK, waiting for new macroeconomic publications, waiting for the completion of the correction. The downward trend continues.

Trading recommendations:

The GBP/USD pair continues the upward correction. Thus, it will be possible to sell the British pound again with targets at 1.2700 and 1.2686 (first support level) after completion of the current correction (MACD indicator turns down or rebounds from the Kijun-sen line). We recommend considering the pair's purchases with targets at the level of 1.2926 and the Senkou Span B line in small lots if the bulls are able to gain a foothold above the Kijun-sen line. In any case, the fundamental background remains not on the side of the pound.

Explanation of the illustration:

Ichimoku indicator:

Tenkan-sen is the red line.

Kijun-sen is the blue line.

Senkou Span A - light brown dotted line.

Senkou Span B - light purple dashed line.

Chikou Span - green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD indicator:

Red line and bar graph with white bars in the indicators window.

Support / Resistance Classic Levels:

Red and gray dashed lines with price symbols.

Pivot Level:

Yellow solid line.

Volatility Support / Resistance Levels:

Gray dotted lines without price designations.

Possible price movements:

Red and green arrows.

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

Gold pendulum: advantage in a falling direction

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The market has been in favor of the yellow market over the past few weeks. Its price has been steadily growing, but the joy of investors was short-lived. The precious metal began to rapidly become cheaper since the end of last Friday, February 28. Experts fear that it will be difficult for gold to recover in such a situation.

The end of last week brought a collapse of gold and silver quotes along with shares of major companies. The price of the yellow metal fell by 4% in just a day, which is the highest drop over the past seven years.

According to analysts, such a collapse has not been observed in the precious metals market since 2013. Gold fell to $1,586 per ounce, and in the futures market, the drop in precious metals traded in euros reached 5%. Nevertheless, the yellow metal began a new week on a positive side, having recouped its previous losses a bit. On Monday, March 2, gold futures are trading in the range of $1,604– $1,605 per ounce, trying to rise higher.

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Subsequently, gold quotes managed to overcome this barrier, reaching $1,608 per ounce, but then it fell again.

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Many experts were alarmed that the collapse of prices for precious metals occurred along with the fall of the stock market. Experts believe that if defensive assets are destabilized, the stock market may collapse. This happened during the global financial crisis of 2008, experts recall.

The reason for the rapid decline in the precious metals market and the stock market, analysts believe the intervention of a number of central banks. According to experts, regulators fear a rise in the price of gold, as this could lead to the devaluation of fiat currencies. As a result, banks had to intervene to urgently stop the yellow metal price rally.

An important role in the fall of the leading precious metal was played by a certain weakening of the US currency. Recall that the dollar lost ground due to market expectations regarding a further reduction in interest rates by the US Federal Reserve. A powerful correction recorded on the stock market provoked a liquidity shortage among hedge funds. As a result, traders decided to take profits from precious metals, which brought high profitability. However, the massive sale of gold and silver put a lot of pressure on their value, causing a collapse in quotes, analysts conclude.

According to experts, the current week in the gold and silver market will be very busy. Experts do not exclude an intensive outflow of funds from the gold ETF funds, as large institutional investors will need additional liquidity. This can cause profit taking on their part. The current drop in the precious metals market will be in the hands of long-term investors, analysts said. They will have a great chance to increase their investments. However, gold will be able to regain its position in the medium term, experts said.

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

EUR/USD. Results of March 2. Conflicting data on business activity in the EU and the US. Louis de Guindos following Powell

4-hour timeframe

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Amplitude of the last 5 days (high-low): 67p - 60p - 54p - 127p - 102p.

Average volatility over the past 5 days: 82p (average).

The first trading day of March and the new week ends surprisingly with the continuation of the strengthening of the European currency, although most of the traders were waiting for a correction today. However, we warned that you should not catch a correction, it is better to respond to the readings of technical indicators, which at the very beginning of the Asian trading session turned up again (we are talking about the MACD indicator). Thus, despite the fact that there were not a large number of macroeconomic events today, traders continued to buy euros almost from the very moment trade had opened. What does this mean? This suggests that market participants continue to ignore macroeconomic data and continue to panic by getting rid of the US currency, and only in pairs with the euro and the franc. The pound was prone to fall against the dollar during the day. Thus, the current movement, which began as a banal technical correction, now looks like a strong upward trend. And most importantly, it's hard enough to say what the trend is based on, besides over panic. Yes, the US stock market suffered serious losses last week. Yes, coronavirus is spreading, including in the United States, where the first death has already been recorded. Yes, the Fed almost openly stated that it was ready to lower its key rate at the March 18 meeting. But why doesn't the pound sterling rise in price? After all, no important and disappointing information has been received in the UK in recent days. Traders cannot be upset by the negotiations with the European Union, since they have not yet begun, and no information has been received on this subject. In general, a paradox. We are no longer talking about the fact that coronavirus will first of all hit the already weak European economy. Many countries in the eurozone are already balancing on the brink of recession, showing low GDP growth. The Chinese virus could finally drive the EU economy into recession. It is the EU economy, not the American one.

However, traders, as we have said, are openly panicking. Nothing else can explain the euro's strongest growth by 120 points on Monday. But the day has not even ended. The average daily volatility of the pair has been no more than 50 points in the past few months... Indirectly, the macroeconomic reports of the day influenced the euro's growth today. However, we believe that they were frankly contradictory and could not, with all the desire, cause such a strong movement. Two key business activity indexes in the manufacturing sectors of Germany and the entire European Union were higher than forecasted and amounted to 48.0 and 49.2, respectively. However, despite this increase, both indicators remained in the so-called red zone. That is, business activity in the locomotive country of the entire EU and the EU itself remains at a low level to talk about the restoration of industrial sectors. Thus, European data were not unambiguous. But US business activity indices were no less ambiguous. According to Markit, in the US manufacturing sector, business activity fell from 50.8 to 50.7 in February. According to ISM, from 50.9 to 50.1. Thus, both indices showed a reduction and both remained in the green zone, which indicates the growth of the industrial sector. Even more conflicting data. Thus, although formally in the EU statistics turned out to be higher than forecasts, and in the US - lower, we do not think that traders even paid any attention to it at all today.

The most interesting event of the day is the speech of the ECB Vice President Luis de Guindos, who is almost as straightforward as Jerome Powell last Friday, said that the regulator is ready to take all necessary measures and adjust all monetary instruments to ensure a steady inflation rate of its target level. Thus, in a veiled way, de Guindos completed a series of speeches by the heads of the largest central banks in the world, confirming the traders' concerns about easing monetary policies of the EU and the US. However! Traders ignored this information, although, in essence, it means that the ECB will also lower the rate, as well as the Fed. Only the Fed will mitigate monetary policy from the current 1.75%, and the ECB from -0.5%. This is the whole difference, but the euro is still continuing to rise in price. Therefore, we recommend that traders, as before, follow the trend, and at the same time, be aware of all the groundlessness of the current strengthening of the euro. Consequently, be prepared for a new sharp reversal of the price down and a strong fall in the euro. Moreover, the upward movement is now almost vertical.

From a technical point of view, the pair continues its steady upward movement and overcomes the first resistance level for this week, at 1.1118, as well as the upper limit of the volatility channel on March 2. There are no signs of correction at the moment, and the MACD indicator may begin to discharge at any time.

Trading recommendations:

The EUR/USD pair is still upward movement. Thus, now it is possible to stay in long positions with the target at the resistance level of 1.1209, until the MACD indicator turns down while prices are decreasing in parallel. It will be possible to sell the pair with the target of 1.0870, when traders will be able to gain a foothold back below the critical line.

Explanation of the illustration:

Ichimoku indicator:

Tenkan-sen is the red line.

Kijun-sen is the blue line.

Senkou Span A - light brown dotted line.

Senkou Span B - light purple dashed line.

Chikou Span - green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD indicator:

Red line and bar graph with white bars in the indicators window.

Support / Resistance Classic Levels:

Red and gray dashed lines with price symbols.

Pivot Level:

Yellow solid line.

Volatility Support / Resistance Levels:

Gray dotted lines without price designations.

Possible price movements:

Red and green arrows.

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

EUR/USD. Guindos's unexpected rhetoric, Washington's state of emergency, and Powell's dovish statement

The euro-dollar pair continues its upward rally: today, the price broke through two resistance levels at once: this allows the bulls to count on final consolidation in the 11th figure area. In the morning, buyers broke the level of 1.1070 (the upper line of the Bollinger Bands indicator on the daily chart), and a little later, they easily broke through the level of 1.111 (the upper and lower borders of the Kumo cloud coincided on the same time frame at this price point), reaching the lower border of this clouds are already on the weekly chart.

If the EUR/USD bulls consolidate above the level of 1.1150, they can already count on testing the 12th figure - after all, the next, most strong resistance level in this case will be the price level of 1.1240 (the upper line of the Bollinger Bands indicator on the weekly chart). However, such heights now seem unattainable - but the 11th figure was also an unattainable goal for EUR/USD buyers not so long ago. Over the past three weeks, the pair has "stepped up" almost 400 points, and recently, growth rates have accelerated significantly, primarily due to the weakening dollar.

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A new wave of sales of the American currency occurred after a statement by the head of the Federal Reserve Jerome Powell on Friday, and within the framework of which, he warned in almost direct text about the interest rate cut in the very near future. And although he literally voiced a more hidden phrase (that "the Central Bank will act appropriately to support the economy"), the market interpreted his words quite clearly. Many currency strategists of large banks (in particular, Danske Bank) have warned their customers that the US regulator can make an appropriate decision already at the March meeting, which will be held on the 18th. Moreover, according to some analysts, there are several scenarios of possible actions on the part of the Federal Reserve: the regulator can reduce the rate by 25 basis points in March and April, and if necessary, in the fall. According to another scenario, the Central Bank at the next meeting will cut the rate immediately by 50 basis points, after which it will take a wait and see position until the fall. The most optimistic scenario suggests one decline in March or April.

As you can see, the market has little doubt that the Fed will react to the current situation by easing monetary policy. The only question is how large the actions of the regulator will be.

At the same time, other fundamental factors put additional pressure on the dollar. The yield on 10-year Treasuries today declined to a historic low of 1.043%, while the stock market continues to lose ground. The news of a second death from a coronavirus in the United States (a man died in one of the nursing homes and a 50-year-old woman died on the eve) only aggravated the situation. In general, the number of confirmed cases of coronavirus in the United States has reached more than 60 people - four of them are in serious condition. A state of emergency was declared in the state of Washington: the governor instructed state bodies to use "all necessary resources" to prepare and respond to the outbreak of coronavirus, including the human resources of the National Guard. Donald Trump hastened to reassure Americans that the process of creating a vaccine against coronavirus is moving "quickly and very well". However, the director of the American National Institute of Allergy and Infectious Diseases disagreed with his optimism - he said that the corresponding vaccine would be ready for use no earlier than in a year and a half.

Thus, all factors such as Powell's resonant statement, a sharp decline in the yield on the Treasuries, the decline of the US stock market, the state of emergency in Washington and lastly, the first deaths from a new virus in the United States, hit the dollar in one powerful front.

Nevertheless, the European currency received unexpected support from the European Central Bank and macroeconomic statistics today. Thus, the Vice President of the ECB, Luis de Guindos, said that it is necessary to respond to the current situation not with the help of monetary policy, but with the help of financial. By the way, the head of the Central Bank, Christine Lagarde, has for several months been calling for tax incentives for Germany and the Netherlands, which could use their budget surpluses. So, Luis de Guindos has voiced similar argument, thus supporting the euro.

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In addition, PMI production indices in European countries for February were published today. Many indicators have been revised upwards contrary to neutral forecasts. For example, the German indicator - from 47.8 to 48, the French - 49.7 to 49.9, the Italian - from 48.8 to 48.9 points. At the same time, the pan-European index has also been revised upward - from 49.1 to 49.2. And although the positive "shift" was mostly minimal, this factor also helped the euro strengthen its position.

In other words, the EUR/USD pair retains the potential for its further growth, and may even test the 12th figure in the foreseeable future. In my opinion, the upward dynamics of the pair will continue until the European Central Bank declares the need to lower the interest rate in response to the crisis. At the moment, surprisingly, the ECB takes a more restrained position on this issue compared to the Fed - for example, today's rhetoric of Guindos helped the European currency gain a foothold in the 11th figure. If the probability of a Fed rate cut in March grows (primarily due to "dovish" comments by representatives of the Federal Reserve), and the ECB remains at least silent about the prospects for its policy, the pair will easily breaks through price lines and test the main resistance level of 1.1240 (the upper line of the Bollinger Bands indicator on the weekly chart).

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