Short-term technical analysis on Bitcoin

Bitcoin is retracing the entire upward move from $6,400 to $10,500. There are many chances that a medium-term higher low has been formed at $8,400 area. Price has stopped at the 50% Fibonacci retracement and is showing stabilization signs.

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Red lines - wedge pattern (broken)

BTCUSD has retraced so far 50% of the entire upward move. Price is showing reversal signs. A higher low and a move above $10,500 would be a very bullish sign for the longer-term trend in BTCUSD. However it is still too early for celebrations by the bulls. Another important Fibonacci retracement is the 61.8% level at $8,000 area. The corrective pull back might not be over and we might see another final move lower towards $8,000 before resuming the up trend. In conclusion, between $8,000-$8,400 BTCUSD has many chances of creating at least a medium-term bottom. From this area we expect price to retest 2020 highs.

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GBP/USD. Andrew Bailey raised the British currency's immunity

The US dollar continues to be under pressure from a negative fundamental background, but not all dollar pairs react to this fact in the same way. For example, USD/CAD is growing, despite the greenback's weak position - the loonie fell after the Bank of Canada cut the rate by 50 basis points. The yen also expects action from the Bank of Japan. The European currency is still in a defensive defense: the rhetoric of the ECB representatives is controversial, and so far indicates the preservation of a wait-and-see attitude.

But the pound in recent days has clearly dominated the US currency. After an impulsive decline to multi-month lows (that is, to the 1.2725 annual low), the GBP/USD pair turned 180 degrees and has been growing for the third day, approaching the boundaries of the 29th figure. Such price dynamics are caused not only by the dollar's vulnerability: the pound reacted positively to the statement of Mark Carney's successor Andrew Bailey, although he actually announced a reduction in interest rates. But buyers of GBP/USD also found positive aspects in the current situation: in fact, Bailey outlined the boundaries of possible actions by the central bank, and this fact made it possible for the bulls to seize the pair's initiative.

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So, the actual head of the Bank of England (he will take up his duties this month) announced that the central bank could reduce the interest rate "approximately to 0.1%". The news in itself is negative for the British currency, but Bailey's subsequent remarks offset the initial reaction. Firstly, he said that the regulator had virtually no space left for political maneuvers, so one could not count on an aggressive reaction from the central bank.

Secondly, the issue of reducing rates is still under discussion, and there is no final decision on it yet. According to Bailey, regulator members need more information about the negative effects of coronavirus before they make an appropriate decision on monetary policy. Thirdly, the option of reducing to the negative area was virtually ruled out - in his opinion, negative interest rates will have a negative impact on the UK banking sector. Well, and fourthly, he said that the government needs to increase the role of fiscal policy. Similar rhetoric is voiced by ECB representatives. By the way, the European Central Bank is also limited in its maneuvers, especially given the ambiguous attitude of some members of the European regulator to the current ultra-soft monetary policy. Largely due to this factor, the euro is afloat, despite the active spread of coronavirus in Europe.

In other words, Bailey outlined the boundaries of possible action on the part of the English regulator, and this fact supported the pound. It is also worth considering that even under the current conditions, the central bank doubts the advisability of easing monetary policy. Based on this fact, it can be assumed that when the epidemic comes to naught (and sooner or later it will happen), the BoE will have to maintain at least a wait-and-see attitude, and perhaps it will consider raising the rate.

And here it is worth recalling that recently published figures of macroeconomic statistics for January allow the BoE to "hold the defense." In particular, all inflation indicators in January came out better than expected. In annual terms, the general consumer price index jumped to 1.8% - there has not been a similar result since last summer. Core inflation also came out in the green zone, recovering to 1.6%. In addition, the retail price index rose to six-month highs (on an annualized basis), and the producer purchase price index instead of declining to -0.1% unexpectedly increased to 2.1%. Similarly, the producer price index rose: +0.3% m/m, 1.1% y/y.

Published data on the labor market also supported the pound (excluding salaries): the unemployment rate remained at a record low 3.8%, while the growth rate of the number of applications for unemployment benefits reached 5 thousand, then most experts expected it to the level of 20 thousand. We were also pleased with retail sales. The consumer activity of the British has increased, despite the panic about the spread of coronavirus. The total retail trade (including fuel costs) grew in January by 0.9% in monthly terms and by 0.8% in annual terms (both indicators came out better than expected). Excluding fuel costs, the indicator showed a more significant increase: firstly, it left the negative area and grew to around 1.6% (instead of the forecasted level of 0.8%) in monthly terms and up to 1.2% year on year, instead of the expected increase to 0.5%.

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Thus, the growth of key macroeconomic indicators and the strategically important speech by Bailey contribute to the pound's growth. And until the Brexit theme reappears on the market (negotiations are still in silent mode), the pound will take advantage of the dollar's vulnerability. According to some experts, the Federal Reserve will not limit itself to a 50-point cut: before the summer, the regulator can again lower the rate. In particular, the head of the Federal Reserve Bank of St. Louis James Bullard yesterday did not rule out a similar scenario - according to him, the rate cut at the March meeting "may not be necessary."

From a technical point of view, the first target of the upward movement is the 1.2920 mark (the resistance level that corresponds to the midline of the Bollinger Bands indicator on the daily chart). When pinned above this target, the GBP/USD pair will surely return to the region of the 30th figure.

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NZDUSD bounces higher as expected

NZDUSD has finally confirmed our reversal warnings and is moving higher towards important Fibonacci retracement levels. Our first bounce target is very close and as long as there is Dollar weakness across the fx markets, we continue to expect a bigger bounce.

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Red lines - bullish divergence

In our previous analysis we noted the warnings for bears that a bounce in NZDUSD was coming. Price is moving higher and the RSI is moving away from oversold levels as expected. Price should at least reach the 38% Fibonacci retracement level. This is our first target. Support is at 0.6245 and resistance at 0.6325. A daily close above resistance will increase the chances of reaching 0.6410. We also keep a close eye on the RSI as we do not want the price of RSI to move below the red trend line. If this happens then we should postpone our short-term bullish scenario and expect new lows.

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Trading plan for EUR/USD on March 5, 2020

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Update on the coronavirus: since the beginning of the outbreak, the total number of cases recorded is 93 thousand. Positive news: 2/3 of the cases in China have already recovered, and the number of new cases has fallen below 200. As for those who are still sick, China's number is close to South Korea's. Negative news: the spread of the virus around the world is fast. At the moment, there are 12 thousand patients recorded outside of China, and it increases by +20% per day. The coronavirus has affected 67 countries already. Taking into account poor medicine and sanitation, a very dangerous outbreak is happening in Iran, so the country has requested humanitarian assistance for the situation.

US news: Strong US data was released - the number of new jobs increased by 183 thousand in February, and the ISM services sector index came out at a high level of 57. Taking into account the Fed's decision of lowering rates by 0.5% (due to the virus' risk on the economy), US looks strong (although in Seattle, due to the people's excitement on the virus, the people bought not only protective masks, but water, toilet paper and flour as well).

The EUR/USD pair is still at a crossroads:

Wait for the growth and test of 1.1246.

Buy after a rollback.

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Bitcoin price movement for March 05-06, 2020

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After having touched the daily bullish order block at 8435.37, BTC is moving sideways. Now it is attempting to break out and close above the 8915.25 from this consolidation area (Green Rectangle). As long as Bitcoin does not retrace to 8657.91, it is likely to break 8915.25 and reach 9247.15 as its primary target and 9785.85 as its secondary target.

(Disclaimer)

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Technical analysis of ETH/USD for 05/03/2020:

Crypto Industry News:

The Ukrainian National Agency for Corruption Prevention (NACP) described in detail the way cryptocurrencies are reported in the annual income declarations. Cryptocurrencies are categorized under the 'intangible asset', although they are also listed by name.

The agency published a set of instructions on how to report the ownership of different types of assets in the annual income declaration. The declaration is mainly intended for government officials, although it must also be submitted by persons with foreign income and persons practicing the profession of freelancers without registering a business.

Cryptocurrencies should be reported in the 'intangible asset' section, which typically includes items of indefinite value, such as intellectual property rights or brand names. However, the instruction explains that you should also report cryptocurrencies and specify the information that should be sent.

Individuals will need to provide the name of their assets, date of last purchase, quantity and the total value of assets on the last day of the reporting period. Cryptographic assets owned by direct family members should also be included.

The agency applied the definition of the virtual assets provided by the Special Group on Anti-Money Laundering and specifically excludes coins that are virtual representations of standard currencies (fiat), securities or other financial assets.

Some Ukrainian officials have already reported having cryptocurrencies in their previous declarations. The current governor of the Odessa region revealed in 2018 that he owned 290 Bitcoins and 11,000 Ethereum, worth $ 2.5 million and $ 2.47 million, respectively.

Ukraine is known for its activity in the cryptocurrency space. In December, the country's parliament passed a law on money laundering regulating the use of cryptocurrencies.

The Ukrainian Ministry of Digital Transformation announced in February that mining cryptocurrencies do not require government oversight. This is despite several high-profile cases where government resources were used to mine cryptocurrencies. In November, it was established that employees of the branch of the national rail service installed over 100 excavators on government properties. A similar case was reported in August at a nuclear power plant.

Technical Market Overview:

Ethereum has broken above the short-term trendline resistance some time ago but keeps trading in a narrow range located between the levels of $212.48 - $235.42. No relief rally has been made so far on ETH/USD because any rally attempt is being capped very quickly by bears. The downward momentum is increasing, so another wave down can occur soon. The next target for bears is seen at the level of $200 and below at $196.61. On the other hand, in order to rally higher, the bulls have to break the technical resistance located at the level of $235.42.

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 05/03/2020:

Crypto Industry News:

The number of cryptographic ATMs around the world has increased to over 7,000, with devices in 75 countries.

At present, CoinATMRadar has added 7,014 existing cryptocurrency ATMs. This number also includes devices that support digital currency other than Bitcoin, including assets such as Bitcoin Cash, Ethereum, Dash and Litecoin.

The world saw its first Bitcoin ATM in 2013, when a company called Robocoin placed a unit in a Vancouver coffee shop.

Currently, 42 different manufacturers are responsible for 4,200 global cryptographic ATMs. CoinATMRadar data shows that only two locations support Robocoin ATMs. Genesis Coin is headed by ATMs in 2,348 locations.

On average, approximately 11.7 new cryptographic ATMs are installed every day, according to CoinATMRadar data from the last seven days. Last fall, Bitstop joined forces with a huge US-based shopping center operator, Simon Malls, to launch five ATMs in five separate shopping centers served by the operator. Miami Florida International Airport also received a Bitstop ATM from the second half of 2019.

Technical Market Overview:

All of the last bounces on Bitcoin were shallow so far, but bulls are still trying to break above the local high at the level of $8,920. The momentum is now increasing, 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 $8,405 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 05/03/2020:

Technical Market Overview:

The GBP/USD pair has made a new local high at the level of 1.2878 as the corrective bounce is getting stronger. This behavior might indicate increased bullish activity, so they are defending the key technical support levels. The momentum behind the move is now positive, so the next target for bulls is seen at the level of 1.2904 and 1.2939. On the other hand, 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 05/03/2020:

Technical Market Overview:

The bears are trying to regain control of the market after the Pin Bar candlestick was made, but bulls are defending the key short-term technical support located at the level of 1.1091. The market conditions are now overbought despite the positive and strong momentum, so the downtrend or correction might occur any time soon. Euro has done the Pin Bar candlestick already, so the next target for bears might be seen below the level of 1.1091 - 1.1076. If this level is violated, then the odds for the price to return to the main channel are even higher.

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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GBP/USD: plan for the European session on March 5. Pound growth continues. Bulls face a new challenge to overcome resistance

To open long positions on GBP/USD you need:

Yesterday, I repeatedly drew attention to the high probability of the British pound's continued growth, which at the moment has led to a resistance of 1.2875, on which the further upward trend depends. A break and consolidation above this range will lead to new purchases and will open a direct path for GBP/USD to the highs of 1.2918 and 1.2970, where I recommend taking profits. If the bulls do not cope with the paramount task, then when a false breakout pattern forms in the support area of 1.2833 will not be unimportant, as this will act as an additional signal for opening long positions. In the absence of activity at this level, and it is quite possible market participants will wait for the performance of the head of the Bank of England Mark Carney, it is best to postpone purchases until the test of the lows 1.2799 and 1.2765, on which the further bullish trend depends.

To open short positions on GBP/USD you need:

Pound sellers are still holding a wait-and-see position, however, in the morning, attention will be at a new resistance level of 1.2875, where the formation of a false breakout will be a kind of signal to open short positions. In this scenario, we can expect the GBP/USD to return to the support area of 1.2833, and then the test of a larger low of 1.2799, where I recommend taking profits. With the option of continued growth of the pair, amid the absence of important fundamental statistics, you can look at short positions after updating the high of 1.2918, or sell GBP/USD immediately for a rebound in the region of 1.2973.

Signals of indicators:

Moving averages

Trading is conducted above 30 and 50 moving average, which indicates that the upward correction will likely continue.

Bollinger bands

Growth will be limited by the upper level of the indicator at 1.2900. In case the pound falls, the middle of the 1.2840 channel will provide 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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Control zones for USDCHF on 03/05/2020

Today, the pair is trading between two significant zones. The resistance is the WCZ 1/4 0.9577-0.9571 and the support is the zone of the average weekly move, which the pair cannot overcome for three days. This indicates the need to look for a buy pattern when approaching yesterday's low and sell if a "false breakdown" pattern of yesterday's high occurs.

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The downward movement is a medium-term impulse, so sales look more preferable.

The determining resistance is the WCZ 1/2 0.9640-0.9629. As long as the pair is trading below this zone, the bearish momentum will continue, and the probability of updating the monthly minimum will be 75%. The test of the specified zone will allow you to get the most favorable prices for the sale of the instrument.

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Daily CZ - daily control zone. A zone formed by important data from the futures market that changes several times a year.

Weekly CZ - weekly control zone. A zone formed by important marks of the futures market that change several times a year.

Monthly CZ - monthly control zone. A zone that reflects the average volatility over the past year.

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EUR/USD: plan for the European session on March 5. Euro buyers retreat from the market, but control remains on their side

To open long positions on EURUSD you need:

Yesterday's report on the ISM index for the US non-manufacturing sector, which showed significant growth in February this year, supported the US dollar and led to the test of an important level of 1.1097, which buyers rush to protect. I talked about long positions from the 1.1097 area in the afternoon review. Now, further movement depends on this range. As long as trading is higher, buyers will expect a return of resistance 1.1145, a breakthrough of which will lead to an upward correction to the upper boundary of the short-term side channel 1.1190, where I recommend taking profits. If the bulls miss the area of 1.1097, then it is best to look at long positions only after updating the lows 1.1041 and 1.0992.

To open short positions on EURUSD you need:

The task of sellers today is to prevent the breakout of resistance 1.1145 and the formation of a false breakout on it. An additional signal to open short positions will be a breakthrough and consolidation below support 1.1097, which throughout the week is actively protected by large buyers. A breakthrough will reverse the trend that the park will push to larger levels 1.1041 and 1.0992, where I recommend taking profits. In the scenario of a breakthrough and buyers returning 1.1145 resistance in the morning, and this is possible even amid the absence of important fundamental statistics, it is best to return to short positions only after updating the high of 1.1190, or sell EUR/USD immediately for a rebound in the region of 1.1239. But we can expect a correction of no more than 20-30 points within the day, since updating this range will return the bullish trend to the market.

Signals of indicators:

Moving averages

Trading is slightly below 30 and 50 moving averages, which indicates the likelihood that the euro will fall further.

Bollinger bands

A break of the upper boundary of the indicator in the region of 1.1155 will lead to a new wave of growth of the euro, while a break of the lower boundary in the area of 1.1110 will increase 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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Overview of the EUR/USD pair. March 5. A coincidence or a verified strategy of Donald Trump?

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - downward.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - upward.

CCI: 55.9572

For the EUR/USD pair, the penultimate trading day of the week begins with a new round of corrective movement within the upward trend. The Heiken Ashi indicator is directed down, so the pair's quotes may fall to the moving average line in the near future. Despite the fact that the euro has grown by more than 400 points in the last 10 days, there is no strong correction, and there are no signs of the end of the trend. The market seems to be put on pause now and is waiting for new data and events. Since there are a lot of events in the world and a lot of statistics, traders often do not know which news to give priority to. Therefore, some of the news and reports are simply filtered out. In such circumstances, we recommend paying special attention to technical analysis, which best reflects the current trend of the pair. And based on technical analysis, longs remain relevant, However, without correction, it will be difficult for bulls to find new reasons to buy the European currency.

In the past week, the market is just full of various kinds of news, messages and data. Most macroeconomic statistics continue to be overshadowed by news from central banks, governments, and top officials. Today, on Thursday, March 5, no important macroeconomic publications are planned either in the United States or in the European Union. Only the speech of James Bullard, a member of the Fed's monetary committee, which will mean little, since the US regulator has already lowered the key rate. It was lowered by 50 basis points at once, which immediately caused a flurry of questions and a storm of emotions among participants in the stock and currency markets. On the one hand, the Fed went ahead and did not wait for the consequences of the "coronavirus" to become such that the US economy will literally lie down, as it was in 2008. It's good. On the other hand, it was almost possible to localize the virus in China. There have been very few new infections in recent days, and no one has yet been able to determine the consequences for the economy. The IMF and other world organizations have already lowered their GDP forecasts for all quarters of 2020. However, this does not mean that the coronavirus will continue to spread. Moreover, in 80% of cases, this is not a fatal disease, so the extinction of humanity is unlikely to threaten. In general, according to most experts and analysts, the reduction of the key rate could not be rushed so much. It was possible to wait for the meeting on March 18, or at least not to reduce the rate by 0.5% at once. After all, the Fed cannot fail to understand that the more the rate is lowered today, the fewer opportunities there will be to stimulate the economy tomorrow. The American economy has looked really good in recent years, especially compared to the British or European economies. This allowed the Fed to raise the rate to a fairly high level for the current conditions. However, now the rate has been lowered four times in a row and is only 1.25%. To the delight of Donald Trump. It was Trump who was the main opponent and fighter against "high" interest rates. It was the US President who regularly "poured mud" on Jerome Powell and the entire Fed, considering it the main source of all US problems. Then, in the last few months, we haven't heard a single word from Trump about Powell. There was even an impression that the odious us leader was resigned to the independence of the Federal Reserve. However, after the Fed urgently resorted to easing monetary policy, Trump immediately stepped up and again began to declare that the rate should be lowered to zero. "The Fed is lowering the rate, however, it should continue to weaken and match other competing countries," Trump wrote on Twitter. The US leader also said that "the game is not on equal terms", referring to global trade relations, and issued a sacramental phrase about "injustice towards the US". Strangely, Trump did not comment on the Fed's decision to lower the rate precisely because of the "coronavirus" and the fall in US stock markets. That is, it may even seem that the US President used the global epidemic to create pressure on the Fed and Jerome Powell. It sounds wild, of course. It is unlikely that the American President is behind the emergence of the Covid-2019 virus. However, you will agree that the comments of the American President regarding the virus and the actions of the Fed cause slight bewilderment. We will not be surprised if the Fed rate is 0% before November 2020, when the presidential elections are held in the States.

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The average volatility of the euro/dollar currency pair rose to 120 points per day, which is just a record value for the euro. We haven't seen such volatility values for a long time. They only once again confirm that the markets are now in a very excited state and can move unexpectedly and sharply in any direction with terrible force. Thus, on Thursday, we again expect a decrease in volatility and movement within the channel limited by the levels of 1.1015 and 1.1255. A reversal of the Heiken Ashi indicator upwards will indicate the end of the downward correction.

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 to adjust. Thus, purchases of the European currency with the targets of 1.1169 and 1.1230 remain relevant now, after the Heiken Ashi indicator turns upward. It will be possible to return to sell positions no earlier than fixing the price below the moving average line with the first target of 1.0986, which is still not expected in the near future.

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 GBP/USD pair. March 5. Joe Biden wins in most states. The pound is growing again on a "swing"

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: 38.2849

"Downward swing" - this phrase can be used to describe the movement of the pound in the last two and a half months. After the political epic with the re-election to the UK Parliament has ended, the pound is inclined to fall against the US dollar. As if waiting for confirmation of its weakness to continue the decline with new strength. The most interesting thing is that even after the Fed rate cut by 0.50%, nothing has changed much in the balance of power between the dollar and the pound. The British currency is still "afraid" of a failure in negotiations with the European Union, the lack of a trade deal, a "hard" Brexit and the short-sighted policy of Boris Johnson. The Bank of England's monetary policy is still more dovish than the Fed.

Since no macroeconomic publications are scheduled in the United Kingdom and the United States for Thursday, March 5, I suggest that we move away from the economy a little. Moreover, now traders only need to wait. Wait for information about the progress of the UK-EU negotiations. Wait for new information about the spread or containment of the "coronavirus". Wait for new performances by Mark Carney and/or Andrew Bailey. Wait for the Bank of England to act, which looks like it will finally lower the key rate. And it is not a fact that any of these events will cause the currency pair to move and start active "body movements" again. The downward trend has continued in recent months, however, it is not strong or confident. We have already said before the events of the last week that the fundamental position of the pound remains extremely weak all because of the same Brexit, the small probability of a trade agreement between Britain and the EU and between Britain and the States. Now there is only one topic for discussion and analysis in the world - the spreading "coronavirus" and the fight against it in medical and economic terms. As we have already said, the euro/dollar currency pair is moving extremely illogically and chaotically. The pound/dollar is trading more calmly, however, it does not react to macroeconomic and fundamental events, which leads us to the conclusion that the movement of this pair is illogical. Based on this, technical factors are now coming to the fore.

At the same time, we have recently moved too far away from politics. While passions raged in the States for the impeachment of Donald Trump, almost every day all the media and periodicals counted the probability of Trump's removal from office, the probability of Trump and Biden winning the presidential election. Then all these topics subsided, although they are quite important in themselves. As you can see, Donald Trump even in the issue of reducing the key rate of the Fed is getting his way, though with the help of a worldwide epidemic. The Fed's interest rate has been reduced by a total of 1.25%, but Trump does not want to stop there and continues to put pressure on Jerome Powell. The US President believes that now is a great time to "get out in the lead" and says that rates should be "at zero or lower" to start refinancing the national debt, however, "because of the blockheads, the States are missing this unique opportunity."

Meanwhile, former US Vice President Joe Biden won the internal party election for the 2020 Democratic presidential candidate. In most of the States where votes were held, he was ahead of Michael Bloomberg and Bernie Sanders. Thus, in July, it is likely to be officially announced that the democratic presidential candidate will be Joe Biden. It remains only to understand what the ratings of Biden and Trump are at the moment and what trend they have.

Well, to top it off, I must say that today's speech by Mark Carney can equally cause a reaction from market participants and not cause it. At the end of the previous trading day, the pound again shot up, although the reasons for this can only be guessed. From a technical point of view, the consolidation over the moving has changed the current trend to an upward one, however, the "swing" remains. Therefore, we would not recommend waiting for a strong growth of the pound. Although it may well grow to the level of 1.3000. In the daily timeframe, the "swing" is more clearly visible.

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The average volatility of the pound/dollar pair over the past 5 days is 120 points. However, if we consider the last abnormal Friday, this figure does not exceed 90-100 points. Thus, Friday's 200 points are not a pattern for the pound at this time. On Wednesday, March 5, we expect the pair to move within the volatility channel of 1.2747-1.2987. This pair is likely to be towards the upper limit.

Nearest support levels:

S1 - 1.2817

S2 - 1.2756

S3 - 1.2695

Nearest resistance levels:

R1 - 1.2878

R2 - 1.2939

R3 - 1.3000

Trading recommendations:

The GBP/USD pair started an upward movement. Thus, it is now recommended to buy the pound with the targets of 1.2939 and 1.2987, but in small lots, since both channels of linear regression are directed downwards. We do not expect strong growth of the pound yet. It is recommended to sell the British currency again with the targets of 1.2756 and 1.2695 if traders gain a foothold below 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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Forecast for EUR/USD on March 5, 2020

EUR/USD

The EUR/USD quote continues to stay at the Fibonacci level of 76.4% on the daily scale chart, in the area of Monday's close. Trading volumes were high, indicating closing positions from purchases since February 21. The euro is unfolding.

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The first goal 1.1035 is to support the MACD line on a daily chart. The second target, 1.0990, is an embedded price channel line, overcoming of which, in turn, opens the way to a medium-term decline in the euro. Investors are laying a 90% chance that the ECB will lower the deposit rate from the current -0.50% to -0.60% at its meeting on March 12th.

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Forecast for GBP/USD on March 5, 2020

GBP/USD

The British pound completed the technical level of the February 10 low on Wednesday. It is possible that the price will unfold from the resistance achieved, but growth to the development of the Fibonacci level of 100.0% at the price of 1.2904 (December 20 low) is also possible. In this case, the signal line of the Marlin oscillator will test the boundary with the territory of the bulls and move down from it.

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The price reached the resistance of the MACD line on a four-hour chart. Marlin shows a weak and uncertain reversal, so the option with continued growth has high chances. The price can be helped by today's data on US factory orders for January, the forecast for which is -0.2%. US employment data will be released tomorrow, the non-farm forecast is 175 thousand, as well as the growth of the trade balance from -48.9 billion to -46.3 billion. We are waiting for the main movement on Friday.

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Forecast for AUD/USD on March 5, 2020

AUD/USD

The RBA lowered its base rate from 0.75% to 0.50% on Tuesday, but since the world was buzzing about the US dollar, the aussie joined it and showed growth for two days, having worked on the daily chart on the Fibonacci resistance level of 223.6 % The Marlin oscillator has left his own wedge up, but currently shows its intention to turn from the boundary with the growth territory. When the price leaves the area under the embedded line of the price channel (below 0.6597) and consolidates below it, this will resume the downward trend with the target of 0.6435 - this is a low of February 28 and support for the underlying price channel line.

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On the four-hour chart, below the level of 0.6597, there is support for the MACD line at the level of 0.6569 (coincides with the peak on March 2). Leaving prices below this level will be the market's final choice towards selling.

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Control zones of NZDUSD 03/05/20

The upward movement is still a medium-term impulse, since the pair could not gain a foothold below the WCZ 1/2 0.6268-0.6263. The zone of the average weekly move is a strong resistance, which coincides with the weekly CZ 0.6309-0.6298. The false breakout pattern of yesterday's high will make it possible to enter the market from this resistance. The first target of the fall will be WCZ 1/2, formed from a weekly high.

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Do not forget that the upward movement is an impulse. This makes it possible for you to consider purchases from WCZ 1/2 0.6268-0.6263 in case the pair falls.

An alternative model will be developed if the closure of today's trading occurs above the weekly CZ. This will make it possible for the pair to go beyond the middle course, which will increase the likelihood of a downward movement to 90%. Purchases from current marks are not profitable. This is due to statistics, which indicate the probability of closing trades above the middle course zone in only 30% of cases.

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Daily CZ - daily control zone. The area formed by important data from the futures market, which changes several times a year.

Weekly CZ - weekly control zone. The zone formed by important marks of the futures market, which changes several times a year.

Monthly CZ - monthly control zone. The zone, which is a reflection of the average volatility over the past year.

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Control zones of USD/CAD on 03/05/20

Yesterday, the pair tested the upper border of the average weekly move, which made it possible to fix the next part of purchases. At the same time, there was no structural violation, and thus, it is necessary to consider the pattern for selling the instrument today when testing the important resistance of the Weekly Control Zone 1/2 1.3401-1.3394. If the closing of trading occurs below this zone again, then the main target of the decline will be the weekly control zone 1.3303-1.3287.

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Developing within the medium-term accumulation zone is profitable and today, the pair is trading at its upper border. This makes it possible to talk about the profitability of sales.

An alternative model will be developed if the closing of today's trading occurs above the level of 1.3401. This will open the way for further growth and retest of the annual maximum formed on February 28. It is also important to understand that such an increase will increase the probability of a downward corrective movement in the future up to 90%, since the pair will go beyond the limits of the weekly average move.

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Daily CZ - daily control zone. The zone formed by important data from the futures market that changes several times a year.

Weekly CZ - weekly control zone. The zone formed by the important marks of the futures market, which change several times a year.

Monthly CZ - monthly control zone. The zone that reflects the average volatility over the past year.

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

Comprehensive analysis of movement options of #USDX vs EUR/USD vs GBP/USD vs USD/JPY (H4) on March 05, 2020

Minuette operational scale (H4)

Did the dollar stop declining? Here's the development options for the movement of the main currency instruments #USDX vs EUR / USD vs GBP / USD vs USD / JPY for March 5, 2020, in a comprehensive form.

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US dollar index

The movement of the #USDX dollar index from March 5, 2020 will be determined by the development and direction of the breakdown of the boundaries of the equilibrium zone (97.10 - 97.60 - 98.10) of the Minuette operational scale forks. We look at the movement markings inside this channel on the animated chart.

The breakdown of the upper boundary of the ISL38.2 (resistance level of 98.10) equilibrium zone of the Minuette operational scale forks will determine the continuation of the movement of the dollar index to the equilibrium zone (98.35 - 98.75 - 99.15) of the Minuette operational scale forks.

On the contrary, in case that there is a breakdown of the lower boundary of the ISL61.8 (support level of 97.10) equilibrium zone of the Minuette operational scale forks, together with the breakdown of the control line LTL (97.00) of the Minuette operational scale forks then the development of the downward movement of #USDX towards the targets will become relevant :

- the final Schiff Line Minuette (96.45);

- local minimum 96.36 ;

- end line FSL Minuette (95.50).

The details of the #USDX movement is presented on the animated chart.

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Euro vs US dollar

Further development of the movement of the single European currency EUR / USD from March 5, 2020 will be determined by the direction of the breakdown of the range :

  • resistance level of 1.1190 on the reaction line RL100.0 of the Minuette operational scale forks;
  • support level of 1.1105 at the boundary of the red zone of the Minuette operational scale forks

The breakdown of the support level of 1.1105 at the boundary of the red zone of the Minuette operational scale forks is the continuation of the development of the downward movement of the single European currency to the boundaries of the equilibrium zones of the Minuette operational scale forks (1.1085 - 1.1030 - 1.0970) and Minuette (1.1020 - 1.0960 - 1.0900).

Alternatively, in case of breakdown of the reaction line RL100.0 (resistance level of 1.1190) of the Minuette operational scale forks will make it possible to continue the upward movement of EUR / USD to the targets:

- local maximums (1.1214 - 1.1240);

- end line FSL Minuette (1.1275);

- warning line UWL38.2 Minuette (1.1365).

The details of the EUR / USD movement options are shown on the animated chart.

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Great Britain pound vs US dollar

From March 05, 2020, Her Majesty's GBP / USD currency will continue to develop its movement depending on the development and direction of the breakdown of 1/2 Median Line channel (1.2810 - 1.2780 - 1.2750) of the Minuette operational scale forks. The details on developing the above levels are present on the animated chart.

The breakdown of the upper boundary (resistance level of 1.2810) of the 1/2 Median Line Minuette channel will lead to an option for the development of the upward movement of GBP / USD to the boundaries of the equilibrium zone (1.2855 - 1.2895 - 1.2930) of the Minuette operational scale forks with the prospect of reaching the lower boundary of ISL38.2 (1.3017) of the Minuette operational scale forks.

Serial breakdown of support levels :

- 1.2750 - lower boundary of the 1/2 Median Line Minuette channel;

- 1.2735 - the initial line of SSL Minuette;

- 1.2724 - local minimum;

- 1.2710- the control line LTL Minuette

will determine the continued development of the downward movement of Her Majesty's currency to the control line LTL Minuette (1.2650) and the warning lines of the Minuette operational scale forks - LWL38.2 Minuette (1.2605) and LWL61.8 Minuette (1.2520).

The details of the GBP / USD movement can be seen on the animated chart.

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US dollar vs Japanese yen

From March 5, 2020, the development of the USD / JPY currency movement of the rising sun will be due to the development and direction of the breakdown of the boundaries of the equilibrium zone (106.40 - 107.45 - 108.55) of the Minuette operational scale forks. The detailed elaboration of the indicated levels is presented on the animated chart.

In case of breakdown of the upper boundary of the ISL38.2 (resistance level of 108.55) equilibrium zone of the Minuette operational scale forks, the development of the upward movement of the currency of the country of the rising sun will be directed to the boundaries of the equilibrium zone (109.25 - 110.00 - 110.65) of the Minuette operational scale forks.

Alternatively, the breakdown of the lower boundary of the ISL61.8 (support level of 106.40) equilibrium zone of the Minuette operational scale forks will lead to an option to continue the downward movement of USD / JPY to the reaction line RL161.8 (103.40) and the final line FSL (102.80) of the Minuette operational scale forks.

We look at the details of the USD / JPY movement on the animated chart.

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The review was compiled without taking into account the news background. Thus, the opening of trading sessions of major financial centers does not serve as a guide to action (placing orders "sell" or "buy").

The formula for calculating the dollar index :

USDX = 50.14348112 * USDEUR0.576 * USDJPY0.136 * USDGBP0.119 * USDCAD0.091 * USDSEK0.042 * USDCHF0.036.

where the power coefficients correspond to the weights of the currencies in the basket:

Euro - 57.6% ;

Yen - 13.6% ;

Pound sterling - 11.9% ;

Canadian dollar - 9.1%;

Swedish krona - 4.2%;

Swiss franc - 3.6%.

The first coefficient in the formula leads the index to 100 at the starting date - March 1973, when the main currencies began to be freely quoted relative to each other.

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EUR/USD: Fed upsets the dollar, will the ECB support the euro?

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The most serious Federal Reserve interest rate cut since 2009 has shown the decisiveness of the US central bank. However, the market reaction turned out to be completely different from what the regulator expected. The main US stock indices plunged 3%, and the yield on ten-year Treasuries for the first time in history dropped below 1%. The spread of the rates of the US and German debt markets declined to the lowest level since 2017, which put pressure on the dollar and made it possible for the EUR/USD pair to rise above 1.12 for a while.

What is the matter? Why did the emergency interest rate cut by the Fed not have a proper impact on the market?

Apparently, investors doubt that Jerome Powell and his colleagues are able to cope with the coronavirus. Obviously, the virus cannot be cured by monetary measures.

"Lower rates will not stop the spread of the disease. They can help risky assets in the short term, but they look like an extremely imperfect solution to what is actually a health problem," PIMCO experts noted.

According to experts, a sharp decrease in the Fed rate is a cause for serious concern about the fate of the US economy. In addition, the regulator did not give a signal of readiness to do much more, which disappointed the financial markets.

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Previous pandemics have had little impact on US economic growth. For example, the epidemics of 1957–1958 and 1968–1969 were less destructive. However, this time everything looks pretty serious. S&P Global Ratings economists have revised downward the forecast for US GDP growth in the first quarter - from 2.2% to 1%. They expect that the figure will expand by only 1% in April-June. According to Goldman Sachs analysts, things could turn out even worse. They lowered the forecast for US GDP growth to 0.9% per annum in the first quarter and to 0% in the second.

It is possible that the Fed has enabled markets themselves to answer the question of what will happen next. The continuation of the correction of the S&P 500 may finally convince investors that the hands of the Fed are short, and will force them to prepare for a recession. The gradual stabilization of US stock indices will signal a return of investor confidence in the ability of the central bank. In neither case will the greenback get any better. Continued pullback of the stock market is fraught with an outflow of capital from the United States, and the growth of quotes will reflect hopes for a further weakening of the Fed's monetary rate.

According to some analysts, the difference in interest rates of the Fed and the ECB could become the key driver of EUR/USD this year.

The market is still waiting for a decrease in the key rate in the US by another 50 basis points at the Fed meeting in March and another decrease of 25 points by the end of the year. At the same time, certain doubts remain as to whether the ECB will continue to reduce the cost of borrowing.

The question of what will be the ECB's policy in 2020 remains open to many investors.

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"I'm not a dove or a hawk, I strive to be an owl," said ECB Chief Christine Lagarde at her first press conference in December 2019.

It is possible that in 2020 she may appear in all three forms.

Wise Owl

Refraining from making changes to the current monetary policy, C. Lagarde got a chance to reconcile the hawks and the doves.

She also refused additional incentives, retaining such an opportunity for the future, because the arsenal of monetary policy instruments of the ECB is already limited. As a wise owl Lagarde is worth holding this trump card up her sleeve, and not playing it right away.

The threat of additional incentives could raise pressure on the euro. Thus, during this period, the growth of EUR/USD may be limited.

Hawk, but only with the help of Germany

Last year, economic growth in the eurozone was sluggish and, most likely, in 2020 the situation will not change. However, the rise in economic activity in the region may disperse the euro and receive positive comments from Lagarde. What will contribute to this? Probably the solution to external problems, such as a slowdown in the global economy and Brexit.

However, the most significant driver may be a program of financial stimulation of the German economy. Until now, Angela Merkel has been stubbornly adhering to austerity policies, despite a significant slowdown in economic growth in the country. However, the situation may change in the future, as calls are increasingly being made to abandon the economy, not only from the ECB, but also from the Social Democratic Party of Germany. The new leadership of one of the partners of the Christian Democratic Union in the coalition has already expressed a desire to increase spending. Moreover, both the SPD and the Merkel party are afraid of strengthening the position of the "green".

There is a possibility that the German government may start a "Green New Deal", which is designed to help the environment and stimulate the national economy, which will support the euro.

Such a decision would help Lagarde breathe a sigh of relief and postpone until better times the adoption of new measures to weaken monetary policy.

Thus, it could be hawkish, but it will depend on the position of Germany.

Strategic Dove

The only statement, although not too much affecting the markets made by Lagarde, was the promise to conduct a strategic review of the ECB policy, which began in January and should be completed before the end of this year. According to its results, the regulator can change the inflation target, which at the moment is slightly below 2%.

One likely scenario is setting a target near 2%. A more flexible target level will allow prices to rise above 2%, which will not entail a tightening of the ECB policy. As a result, the euro may decline even at the moment when the target level change is announced.

An even bigger dove

A bolder measure by the ECB would be to allow the average inflation rate to stay above 2% for several years. This can offset the impact of the previous period of low inflation. Germany and other northern countries are likely to criticize such a decision, but it cannot be completely ruled out. Such a change in the ECB's mood in favor of the "dove may cause a drop in EUR/USD.

Thus, ECB Chairman Lagarde may start the year as a wise owl by taking a wait-and-see attitude, which will put pressure on EUR/USD. Then it can take a hawkish position and propose a tightening of monetary policy, however, this will depend on Germany's incentive program. And finally, the head of the ECB may return to a soft policy, which will pull down the single European currency.

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EUR/USD. Take-off aborted: the pair retreated, but going into sales is still risky

After a rapid take-off, the European currency began to gradually lose the points it won. This trend applies not only to the EUR/USD pair: in all cross-pairs, the euro to one degree or another demonstrates weakness. This suggests that the decrease in EUR/USD is not due to the restoration of the greenback - the role of the first violin is played by the single currency. By and large, the corrective pullback has been brewing for a long time: firstly, the price has shown almost growth that has not retreated since February 21, and gaining a half more than 400 points. Secondly, the eurozone does not have immunity from the coronavirus, therefore the problems that other countries of the world have encountered are also common to European states. Italy is now one of the three most epidemiologically disadvantaged countries in the world, along with Iran and South Korea. In Europe, Italians lead in both the number of infected COVID-19 (over 2.5 thousand) and the number of deaths (79 cases). The Italian government decided to close all schools and universities in the country, and many public events were canceled.

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It is obvious that the European currency can not behave in isolation under such circumstances. Over the previous weeks, the EUR/USD pair has become more expensive due to a certain uncorrelation: representatives of the Federal Reserve prepared the market for a rate cut, while ECB members remained calm and did not rush to any conclusions. Moreover, some officials of the European Central Bank insisted that such situations should be "resolved" not with the help of monetary policy, but with the help of financial policy. At the same time, members of the Fed increasingly talked about the need to ease monetary policy. This verbal uncorrelation provided strong support for the pair. But now, after the Fed has had its say, the market is wondering whether the ECB will become the next regulator to resort to protective measures. Yesterday, interest rates were lowered by the Reserve Bank of Australia and the Federal reserve, today by the Bank of Canada (also by 50 basis points), and next in line are the Bank of Japan and the Reserve Bank of New Zealand.

Whether the ECB will stay on the sidelines is an open question. On the one hand, there is a certain split in the ECB's camp: some members of the regulator have often criticized the ultra-soft conditions of monetary policy since the autumn of last year, pointing out its side effects. But it is worth considering that in there was also no unanimity in the Fed's camp during the "peacetime" – some were in favor of lowering the rate, while others were in favor of maintaining a wait-and-see position. Some of them even demanded to raise the rate by the end of this year. In other words, the Fed had a full range of opinions, but the 50-point rate cut was voted for unanimously yesterday. In the light of these events, it has been suggested that ECB members will also "bury the hatchet" if necessary and make a consolidated decision.

Today it became known that members of the European regulator held a meeting via conference video link, where they discussed yesterday's decision of the Fed and the general situation in the world and in the eurozone. According to the Reuters news agency, the parties did not come to a single decision based on the results of this "online meeting". At the same time, informed sources stressed that the issue of responding to the consequences of the virus with the help of monetary policy was not on the agenda. Meanwhile, ECB representatives declined to comment on the results of these negotiations. Therefore, traders were left alone with market rumors, which, as we know, do not always correspond to reality.

In addition, EUR/USD traders were not very pleased with the findings of the European Commission, whose members assessed the current situation. In their opinion, the consequences of the epidemic will be "more tangible" relative to earlier forecasts. In view of this fact, the European Commission may revise its economic forecasts in the direction of deterioration. For example, in Brussels today it was suggested that Italy and France might face a technical recession this year.

Against the background of such prospects, the European currency plunged throughout the market, including paired with the dollar. The EUR/USD pair updated the daily low, dropping to around 1.1096. But in the end, the pair stayed within the 11th figure, confirming the riskiness of short positions.

In my opinion, the euro this time will hold back the blow: while the ECB does not openly announce the easing of monetary policy parameters, the pair will demonstrate a bullish mood, primarily due to the vulnerability of the US currency. Moreover, according to some experts, the ECB has a priori fewer opportunities to neutralize the economic consequences of coronavirus than the Fed. Therefore, the market still expects further steps to reduce the interest rate from the Fed (Trump has already urged Powell not to stop there), and any hints in this context will increase pressure on the dollar.

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From the technical point of view, the EUR/USD bulls need to stay above the 1.1090-1.1110 price range (the lower and upper boundaries of the Kumo cloud on the daily chart). The resistance level (the goal of the upward movement) is still the 1.1240 mark - this is the upper line of the Bollinger Bands indicator on the daily chart. If members of the Fed will continue to maintain a dovish attitude, the pair can test this target as early as this week.

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

GBP/USD. Results of March 4. Pound calm as an elephant. Strong ISM index offset by the Fed key rate cut

4-hour timeframe

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Amplitude of the last 5 days (high-low): 108p - 87p - 194p - 111p - 103p.

Average volatility over the past 5 days: 121p (high).

The British pound has been adjusting quite calmly over the past two days, not reacting in any way to the powerful events taking place in the world. The British currency slightly rose amid the easing of the Fed's monetary policy, did not respond to the comments of Mark Carney, who said that the Bank of England would help British business and the economy cope with the negative impact of coronavirus. The head of the British central bank, who will resign after 10, said that if the situation worsens and the economic shock does not pass, the BoE is ready to take all necessary measures to stabilize the economic situation. It is obvious to all traders that we are talking about lowering the key rate. The Fed and the Reserve Bank of Australia have already lowered their key rates; now the British and European regulators are in line. But we are more interested in the GBP/USD pair rate, as well as the reaction of most traders to what is happening in the world. But there is practically no reaction now. One has only to look at the movement of the EUR/USD pair and compare it with the movement of the pound/dollar. It immediately becomes clear that the British currency is now in hibernation. However, perhaps this is even better than if the same unreasonable and non-predictable movements as the EUR/USD would now flow along the pound/dollar pair.

Despite the fact that most traders of the pair keep calm and cool, events concerning the UK and the pound are now abound. We've already talked about Mark Carney's speech. In fact, now you only need to wait for the next meeting of the British regulator to find out about the rate cut. Traders did not react to the Fed rate cut. At the same time, the first stage of negotiations between Britain and the EU concerning the further coexistence of the bloc and the UK after 2020 is taking place. So far, no specific information has been received in the media, but we still believe that it will be very difficult for traders to wait for optimistic data. Although you should not jump to conclusions. You should simply monitor the nature of the information received. And it can start arriving tomorrow, when the first stage of negotiations is completed.

By the way, we somehow too quickly concluded that the euro/dollar currency pair is being traded very strangely, but the pound/dollar is much more logical. Today's macroeconomic statistics from overseas were completely ignored by market participants. Let's start, however, with British statistics. The index of business activity in the construction sector was 53.2 in February, only slightly lower than in January (53.3). Thus, such a weak change in the value of the indicator could not cause a serious market reaction. The data from the United States were required to favorably influence the position of the US currency. ADP's report on changes in the number of employees in the private sector exceeded experts' forecasts and amounted to 183,000. Recall that it is very important for the US government that the country maintains low unemployment and a strong labor market. Therefore, any positive data on the labor market almost always causes the dollar to strengthen. But not today. The ISM index of business activity in the service sector could also provide significant support to the greenback, which rose to 57.3 compared to the previous month (55.5). Interestingly, the same Markit index remained unchanged at 49.4. That is, two indexes that show the state of the same sphere indicate completely different things. Nevertheless, the ISM index is considered more important, so we had the right to expect the dollar to grow. But it did not happen after the publication of this indicator. Andrew Bailey, who will succeed Mark Carney from March 16, 2020, is also scheduled to speak today. Perhaps the future head of the Bank of England will tell the markets something interesting. However, we still tend to believe that traders are lying low and waiting. Perhaps they are waiting for data from trade negotiations. Perhaps they are waiting for positive news about the fight against the coronavirus. Perhaps they are waiting for the tension to subside from the stock and currency markets.

An upward correction continues from a technical point of view, and the price has already worked out the Kijun-sen line. Thus, a rebound from this line can trigger a resumption of the downward movement. However, despite the fact that, from our point of view, the general fundamental background remains in favor of the dollar, now is such a time that it is extremely difficult to predict the movement of any pair. Ichimoku and Bollinger Bands show a downward trend.

Trading recommendations:

The GBP/USD pair continues the upward correction. Thus, it will be possible to sell the British pound again with the target of the support level of 1.2686, after the 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 1.2929 and the Senkou Span B line in small lots if the bulls are able to gain a foothold above the Kijun-sen line. The macroeconomic background now has practically no effect on the movement of the pair.

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