EUR/USD. Preview of the week: coronavirus, coronavirus and coronavirus

The trading week began alarmingly: the main currency pairs opened trading with a substantial gap, responding to recent events. The euro-dollar pair tested the 14th figure for the first time since January last year, the yen paired with the dollar reached the middle of the 101st figure, and the aussie collapsed to record lows, dropping to around 0.6313. The US currency has mostly regained its position by the start of the European session, but still remains vulnerable. The sword of Damocles in the form of another round of Federal Reserve rate cuts looms over the greenback, exerting significant pressure. The coronavirus continues to carry out subversive work, covering more and more new horizons.

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COVID-19 provoked not only easing of monetary policy in Australia, the US and some other countries - but also unleashed a trade war in the oil market. Black gold prices fell to multi-year lows on Monday - for example, a barrel of Brent brand is currently trading at 32 dollars, and WTI at 29. The price war began with the fact that Moscow did not support the initiative of Saudi Arabia to further reduce oil production - Russia announced that the corresponding obligations expire on April 1. Riyadh took countermeasures in response: first, the Saudis promised to increase the production of black gold in April by more than 2 million barrels per day. Secondly, Saudi Arabia announced the most significant oil discounts in the last twenty years to potential buyers on the foreign market. Since all these events took place on the weekend, the oil market collapsed on Monday. By the way, the collapse in prices became the worst since the beginning of Operation Desert Storm in 1991. The commodity market only fueled panic among traders in the foreign exchange market.

The economic calendar of the current trading week is not saturated. Only two main events can be noted - this is the release of data on the growth of US inflation and the March meeting of the ECB. The Chinese data may also have a certain impact on the pair: inflation indicators will also be published in China. But despite the importance of the above events, they will play a secondary role for EUR/USD. The news flow associated with the spread of coronavirus will be the main catalyst for the growth or decline of the pair. This news flow is clearly not in favor of the dollar.

To date, more than a hundred countries of the world are covered by coronavirus. According to WHO, the number of cases of infection in the world has increased to 110,034. At the same time, over the past day, 3,610 new infected and 71 deaths have been recorded. At the same time, the first five sad ratings look like this: China (80 699), South Korea (7 314), Iran (6 566), Italy (5 883) and Germany (951).

In the United States, more than 500 people are already infected. According to the latest data released by CNN, the total number of deaths of the disease reached 21. Of these, 18 deaths were recorded in Washington, two in Florida and one in California. Two states have declared a state of emergency.

In turn, economists continue to calculate possible losses from the epidemic. So, according to experts surveyed by Bloomberg, the global economy could lose up to $2.7 trillion. Analysts voiced four scenarios. In the event of the most negative (that is, a pandemic), global GDP growth will be 1.2% (before the Bloomberg virus predicted growth by 3.1%), and the eurozone and Japan will face a recession. The US economy will also significantly decline (with a high probability of a recession), while unemployment will increase in the country.

That is why regular reports on the rate of distribution of COVID-19 provoke such a strong volatility in the EUR/USD pair. In addition, do not forget that some Fed members (in particular, Bullard and Kaplan) associated this factor with the likelihood of a further rate cut. The market is currently discussing a scenario in which the Fed will lower the interest rate by 25 basis points at the March meeting and another 25 at the April or June meetings. A tougher option involves reducing the rate immediately by 50 points this month.

And here it is worth considering that the Fed is freer in its maneuvers than the ECB, whose base rates are already in the negative area. At the same time, it is possible that Christine Lagarde will allow the easing of monetary policy at the March meeting - in any case, its rhetoric will be extremely soft and pessimistic. This fact may put pressure on the euro. Nevertheless, the dovish results of the ECB meeting will not be able to turn the pair 180 degrees. After a temporary price pullback, the pair will still go up, as the Fed will most likely resort to more aggressive measures than the ECB.

Recession in US inflation will put additional pressure on the dollar. Preliminary data for February will be released on Wednesday. According to forecasts, the general consumer price index will show negative dynamics: on a monthly basis, it will slow down to zero, and on an annualized basis - to 2.2%. Core inflation should reach the level of January - in both monthly and annual terms.

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But macroeconomic reports will play a secondary role this week. The dynamics of the spread of coronavirus, as well as comments by Fed representatives, will become the main catalyst for the price movement of the EUR/USD. For bulls of the pair, it is important to gain a foothold above 1.1375: in this case, the Ichimoku indicator will generate a bullish Parade of Lines signal on the weekly chart. This will allow buyers to settle in the 14th figure, and subsequently discover new price horizons.

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Technical analysis of ETH/USD for 09/03/2020:

Crypto Industry News:

The Chain Integration Pilot (CHIP) from Auburn University RFID Lab in Alabama has published official documentation that aims to demonstrate the savings in Blockchain technology that can be achieved in the modern supply chain.

This concept was designed to receive, encode, distribute and store serialized data from multiple points throughout the supply chain at Hyperledger Fabric. The pilot collected live data from the brands Nike, PVH Corp. and Herman Kay and major US retailers, Kohl and Macy.

CHIP was launched in 2018 and claims to be the first supply chain project that integrates information extracted from RFID tags into the Blockchain network.

The project reported data on 223,036 goods loaded into a distributed register. Only 1% of data entries were sent by stores, with 87% of the data coming from distribution centers and the remaining 12% coming from the coding site.

In this regard, CHIP stated that Blockchain is a functional solution to problems with serialized data exchange in the supply chain. The report states that participating companies "were able to record transactions containing serialized data in a common language and share this data with relevant trading partners."

The article indicates "a huge number of errors and inefficiencies in currency supply systems," estimating that eliminating counterfeiting and shrinking the supply chain could unlock $ 181 business opportunities.

In contrast, the article claims that pre-existing exchange networks are built for "outdated internet technologies" and are not suitable for handling the massive amount of serialized data that is generated in the modern supply chain. "

The team points to the lack of an "effective, industry-specific solution for exchanging serialized data between business partners," despite the introduction of data such as RFID tags and QR codes over a decade ago.

In addition, the report claims that previous attempts to integrate infrastructure to collect mass information throughout the entire supply chain have been "limited by the industry's inability to share serialized data."

Technical Market Overview:

The ETH/USD pair has been falling lower during the weekend after the bears have managed to break out from the parallel channel range and all the technical support levels had been violated. Currently, Ethereum trades around the level of $200 after the swing low has been made at the level of $196.61. There is no sign of the downtrend reversal despite the oversold market conditions. The next target for bears is seen at the level of $190.00.

Weekly Pivot Points:

WR3 - $280.41

WR2 - $266.81

WR1 - $233.00

Weekly Pivot - $218.78

WS1 - $185.21

WS2 - $170.40

WS3 - $159.54

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 09/03/2020:

Crypto Industry News:

A French commercial court classified Bitcoin as a currency during a recent trial.

Local media reported that the commercial court in Nanterre decided on February 26 to qualify Bitcoin as an exchangeable resource that cannot be individualized like fiat money.

The ruling was part of the dispute between the French cryptocurrency exchange Paymium and the BitSpread investment company dealing with alternative assets. According to a report, Paymium granted BitSpread in 2014 a loan of 1,000 Bitcoins.

Holding a leased 1,000 BTC, BitSpread also obtained 1,000 Bitcoin Cash when a hard fork creating altcoin was carried out in 2017. Now both sides are questioning BCH rights worth over $ 350,000.

To resolve the dispute, the court had to deal with the legal nature of Bitcoin, and after defining it as a convertible asset, it identified a Bitcoin loan as a consumer loan. This type of loan transfers ownership to the borrower during the loan period.

For this reason, the court stated that Bitcoin Cash belongs to the borrower, as dividends belong to shareholders. The article suggests that because of this court ruling, future cryptocurrency loan agreements may contain a clause regarding the return of additional assets created by the fork.

Technical Market Overview:

The BTC/USD pair has been falling lower during the weekend and all the technical support levels had been violated. Currently, the Bitcoin trades around the level of $7,930 after the swing low has been made at the level of $7,670. There is no sign of the downtrend reversal despite the oversold market conditions. The next target for bears is seen at the level of $7,581.

Weekly Pivot Points:

WR3 - $9,697

WR2 - $9,419

WR1 - $8,697

Weekly Pivot - $8,456

WS1 - $7,720

WS2 - $7,436

WS3 - $6,712

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 09/03/2020:

Technical Market Overview:

The GBP/USD has made another higher high at the level of 1.3121 after the bulls have managed to break out from the parallel channel and the key technical resistance located between the levels of 1.3047 - 1.3068 has been violated ( now it will act as a support for the price). Despite the overbought market conditions the momentum is still high and positive, to another leg up might occur any time now. The next target is seen at the level of 1.3017 and the immediate support is located at the level of 1.3168.

Weekly Pivot Points:

WR3 - 1.3258

WR2 - 1.3289

WR1 - 1.3204

Weekly Pivot - 1.2969

WS1 - 1.2881

WS2 - 1.2656

WS3 - 1.2581

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. 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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GBP/USD: plan for the European session on March 9. Pound continues to rise amid general weakness of the US dollar due to

To open long positions on GBP/USD you need:

The British pound opened a gap up and continues to strengthen against the US dollar amid the spread of the coronavirus. However, it is worth noting that the pound's growth is fully associated with the weakness of the US dollar, since the UK has enough of its political problems in the face of the start of trade negotiations with the EU. At the moment, the bulls' task is to keep the pair above the level of 1.3062, where the formation of a false breakout will be a signal to open long positions in the expectation of continued growth. However, only a breakthrough and consolidation above resistance 1.3104 will open the direct path of GBP/USD to the area of new highs 1.3133 and 1.3163, where I recommend taking profits. If a breakout of support 1.3062 takes place in the first half of the day, then it is best to look at long positions after updating the lows of 1.3030 and on the rebound from support 1.2996, where the moving average also goes.

To open short positions on GBP/USD you need:

There are enough disagreements in the negotiations between the EU and the US, so you should not expect the pound to sharply grow without an escalation of the situation with coronavirus. The formation of a false breakout in the resistance area of 1.3104 will be the first signal to open short positions in the pound, and if there are no major players there, it is best to postpone sales until the highs of 1.3133 and 1.3163 are updated, where GBP/USD can be sold immediately for a rebound. An important goal of the bears will be to return the support of 1.3062 to themselves, which will necessarily lead to the overlap of the Asian gap and an update of the low of 1.3030. However, the 1.2996 area will be a more distant goal, where I recommend taking profits. It is in this range that the pound will regain market equilibrium, and the lower boundary of the side channel will be formed there.

Signals of indicators:

Moving averages

Trading is conducted above 30 and 50 moving average, which indicates the continuation of the upward trend.

Bollinger bands

A break of the upper boundary of the indicator in the region of 1.3104 will lead to a new wave of pound growth. Under the scenario of decline, support will be provided by the average boundary at 1.3020, and you can buy the pound for a rebound from the lower boundary at 1.2970.

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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 9. Coronavirus in business. Euro rose to 15th figure, braced to strengthen

To open long positions on EURUSD you need:

Weak export decline in China and news on the spread of coronavirus in the US and Australia, as well as the closure of nearly all production in northern Italy, led to the collapse of stock market futures and a sharp weakening of the US dollar against the euro. Good fundamental data on the state of the US labor market provided only temporary support to the US currency. At the moment, it is best to consider new long positions in a pair after a correction from the lows 1.1364 and 1.1338, and even better after the support test 1.1311. Given that the euro is seriously overbought, further growth will be only against the background of a worsening global situation with the coronavirus. A break and consolidation above resistance 1.1430 will open a direct road to the area of highs 1.1459 and 1.1487, and also lead to a resistance test 1.1514, where I recommend taking profits in the morning.

To open short positions on EURUSD you need:

I do not recommend selling the euro under current conditions, since no one knows when this panic will end. Given that traders are ignoring the economic calendar, it is best to wait for more detailed sell signals, the first of which will be when a false breakout forms in the resistance area of 1.1459, or slightly higher, near the level of 1.1487. If downward movement does not occur from these ranges, it is best to postpone short positions until the highs of 1.1514 and 1.1539 are updated, however, you can count on them for correction by no more than 20-30 points. It will also be important to return EUR/USD to the support of 1.1394, which will increase the pressure on the pair and lead to an update of the lows of 1.1364 and 1.1338, where I recommend taking profits.

Signals of indicators:

Moving averages

Trading is above 30 and 50 moving averages, which indicates a continuation of the bullish trend.

Bollinger bands

A break of the upper boundary of the indicator in the region of 1.1430 will lead to a new wave of growth in the euro, while the average boundary of the indicator in the region of 1.1338 will act as a 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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Technical analysis of EUR/USD for 09/03/2020:

Technical Market Overview:

The EUR/USD bulls push the prices towards the level of 1.1497, after the level of 1.12050 had been violated. The Bearish Engulfing candlestick pattern has been made at this level as well, which indicates a possible trend reversal or a temporary correction on EUR/USD. Moreover, there is a clear bearish divergence between the price and momentum oscillator in overbought market conditions, so the move down might occur any time now. Please keep an eye on the technical level located at 1.1361 - 1.1340.

Weekly Pivot Points:

WR3 - 1.1782

WR2 - 1.1563

WR1 - 1.1471

Weekly Pivot - 1.1255

WS1 - 1.1146

WS2 - 1.0916

WS3 - 1.0820

Trading Recommendations:

The downtrend was valid as long as it was terminated or the level of 1.1445 clearly violated, so now all upward moves will not be treated as local corrections in the downtrend, but as a new uptrend. The Ending Diagonal price pattern visible on the larger timeframes like weekly has been completed and the EUR/USD is developing a new wave up.

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Gold Price Movement For March 09, 2020

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On the Monthly Chart, we can see clearly that gold is already making a market maker buy model pattern and heading toward the monthly high at 1788.89.The monthly high at 1824.30 is the nearest buy side liquidity pool. As long as gold does not retrace and close bellow the 1445.20 level then it is likely to reach the liquidity pool.

The overall bias for gold is still bullish.

(Disclaimer)

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USD index price movement for March 09, 2020

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As we can see on the 4-hour chart, the USD Index is now moving toward the weekly liquidity pool sell stop order at 95.59-95.50. Although there is a possibility that the USDX may retrace but as long it does not close above the 97.47-97.50 levels the bias for the USD Index is still bearish.

(Disclaimer)

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Control zones for AUDUSD on 03/09/2020

The sharp increase in volatility in today's Asian session allowed us to update the annual minimum and go beyond the average moves of the month and week. The subsequent pullback compensated for the drop by 50%. Future plans will depend on the closing of today's trading. If the closing occurs near the opening level, then purchases will come to the fore tomorrow.

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The above model will allow you to create a pattern of absorption of the weekly level, which will allow you to hold purchases for the next week.

An alternative option will be developed if the closing of today's trading takes place at the bottom of the morning drop. This will indicate a continuation of the downward movement, and the probability of testing the lower monthly CZ again will increase to 75%.

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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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GBP/USD. Preview of the week. The "swing" continues. Is US inflation starting to slow down?

24-hour timeframe

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The British pound sterling also began an upward movement on the 24-hour timeframe, followed by the euro currency, which was a fairly strong one. Similar to the euro's case, there was no particular reason to start such a movement. However, traders may still object that such an event as the Federal Reserve rate cut could and should have been worked out properly. Thus, at least, there were formal reasons for the pound/dollar to start getting more expensive. The growth of the British currency has been going on for four days, but the overall picture of the "swing" remains, which is especially visible on the 24-hour timeframe. The downward trend remains in force, but frequent and strong (relative to the trend movement) corrections make it very difficult for traders to work for a decrease. At the moment, the pair's quotes are consolidated above the critical Kijun-sen line, so further downward movement is called into question. However, we believe that at the beginning of next week we may witness a new round of downward movement. As for the fundamental background, it generally remains the same as for the EUR/USD pair. Emergency Fed rate cut, coronavirus, fall, recovery, and a new decline in the US stock market. In addition, the UK has Brexit and trade negotiations with the European Union. Questions to the markets remain the same as in the case of the euro/dollar pair. We do not believe that the pound's strong growth is justified macroeconomically.

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An important macroeconomic report from Great Britain or the United States will not be released on Monday, Tuesday, Thursday and Friday. Thus, traders will have to wait for Wednesday to receive and analyze new data from the US and Britain. First, the UK GDP data for January will be known, according to estimates by the Office of National Statistics and the National Institute for Economic and Social Research (NIESR). The first indicator is expected to decrease from 1.2% to 0.8% - 0.9% in annual terms and from 0.3% to 0.1% - 0.2% in monthly terms.

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The second indicator is expected with an increase of 0.1%, which is already not bad, considering the value of the previous month was 0%. It should also be noted that more important indicators of GDP, quarterly, will not be published this time. However, even by these indicators, we can say that there was no acceleration of the British economy in January.

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A report on the UK industrial production for January will also be released on Wednesday, and the forecasts are disappointing. It is expected that the indicator will decrease by another 2.3% in annual terms, and will add 0.4% on a monthly basis. However, if you look at the chart above, it becomes obvious that the indicator has not had any positive changes for more than a year and a half. And that's all the planned news in Great Britain for this week.

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The most interesting data on the United States will also be released on Wednesday. There is only one report in the EU – inflation. In recent months, the core consumer price index accelerated to 2.3% - 2.4% y/y and consistently showed this value. Recall that core inflation is an indicator that does not take into account changes in prices for volatile goods, such as food and energy. According to the results of February, the value of this indicator, most likely, will not change and will amount to 2.3%.

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The main indicator of inflation has accelerated from 1.7% in August to 2.5% in January, and it is expected to slow down to 2.3% in February. This is not critical for the United States. Recall that the target inflation rate of the Fed coincides with the ECB and is equal to 2%. However, if the European Central Bank fails not only to reach a stable +2%, but also to reach this level in principle, then, as we can see, things are going much better overseas with rising prices. Plus, we should not forget that the Fed's decision to lower the key rate should boost the economy. Loans have become cheaper, and economic activity should grow. Thus ,the decline to 2.3% (if it takes place and is recorded in February) may indeed be temporary.

In fact, at this time, traders do not need any news or messages at all. The dollar is selling on almost all market fronts. Thus, for more logical trades, we are waiting for panic to leave the markets. Based on this, there may be a strong trend movement on all days, despite the fact that statistics will only be available on Wednesday. The statistics of the third trading day of the week can be easily ignored by the markets. Traders should be prepared for this development.

From a technical point of view, the pound/dollar pair has crossed the critical line, so now the pair has an upward trend. However, we do not yet believe that the bulls are able to form a full-fledged upward trend. Moreover, there is another strong barrier waiting for traders from above in the form of the Senkou span b line. Moreover, the Bollinger bands are directed down (at the moment), which means that the chances of resuming the downward trend remain. The key now in the market is the concept of panic, which leads to illogical trading in our opinion.

Recommendations for short positions:

On the 24-hour timeframe, the pound/dollar pair should return to the area below the critical line, so that short positions become relevant again with the first goal of the support level of 1.2626.

Recommendations for long positions:

Formally, you can buy the British pound with the goal of resistance level 1.3100, however, in small lots, since the Golden Cross has not yet formed, and the price is located below the Ichimoku cloud. On the 4-hour chart, the movement is recoilless, so a downward pullback is possible next week.

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.

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Overview of the EUR/USD pair. March 9. Did the Fed cut the rate for insurance or is this a veiled attempt to meet Donald

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: 168.1668

For the EUR/USD pair, the new trading week begins with a hint of the beginning of a downward correction. The upward movement as a whole is still maintained, and it is quite strong and recoilless. Traders continue to ignore any macroeconomic statistics. This conclusion is easily made based on the events of the past week when there was no reaction to the ADP and Nonfarm Payroll reports in the US. When there was no reaction to weak inflation in the EU. Thus, until the period of ignoring the macroeconomic background is completed, it is difficult to say what will happen in the market at all. At any time, new information about the "coronavirus" may arrive from the governments of the largest countries in the world that must fight the epidemic. Thus, what will be the reaction of the stock and currency markets to these messages? It is impossible to predict. That is, sharp turns and even stronger movements are possible. However, no one can predict these events either. Therefore, the only thing left for traders is to follow the trend and track of technical factors. On Monday, March 9, the only macroeconomic publication will be in Germany - industrial production for January with low annual forecasts. However, we believe that it is unlikely that traders will note this report. No more planned economic events are scheduled for tomorrow.

Since the market is not governed by macroeconomic events, we offer traders to understand the more global issues of the current time. Although several of the world's largest central banks have already lowered their key rates, we still believe that the US economy remains the strongest economy in the world and, judging by current indicators, it does not need to be stimulated at all. And if you compare it with the European one, there is absolutely no doubt whose in advantage. However, last week, the Fed very abruptly and unexpectedly decided to ease monetary policy at an emergency meeting, with just 0.50%. This did not have much effect on the dollar, as it continued to depreciate against most currencies. The US stock market was affected and key stock indices began to adjust after a strong collapse. However, the main question is why the Fed was in such a hurry to cut the rate? Why did you do it now? Why couldn't it wait for the March meeting? Why 50 basis points at once? As you know, "coronavirus" was first detected in the Chinese province in December 2019. That is exactly 3 months ago. Distribution outside of China began about a month ago. In China itself, we can say that we managed to localize the epidemic. The number of newly infected people decreases, and the number of recovered people increases. At the same time, the US economy showed no signs of slowing down due to the "coronavirus" or at all. That is we can't say that the economy started experiencing problems and, to support it, the Federal Reserve went for a rate cut. Further, the drop in the stock market. Perhaps the Fed wanted to play ahead of the curve to avoid the 2008 crisis. However, first of all, the future of both the world and American economies will now depend on medicine. Since if the Chinese virus continues to spread, then even if we lower the rate, it will not help the stock market and the economy. Second, why cut the rate by 50 basis points at once?

We believe that Donald Trump, who believes that rates should be zero or even negative, either convinced Jerome Powell of this or found some ways to pressure the Fed. Recall that in America, the Central Bank does not obey the President or Congress. Thus, Trump cannot issue an order. However, in the last three years, it was Trump who "read the mantra" about lowering rates and that the Fed is America's main enemy and not China. It seems that now the Fed has just found a great opportunity to "save face" in front of the public and at the same time meet the requests of the US President. The rate has been lowered. But since the virus has not been defeated, the Fed will still have plenty of opportunities to reduce it even more, again justifying these decisions with a "coronavirus", reinsurance, or a stock market crash. As a result, Trump gets what he needs ahead of the November 2020 presidential election. If this hypothesis is correct, the Fed will continue to cut rates in 2020, and the US dollar now really has the opportunity to complete a long-term upward trend, at least in conjunction with the euro.

From a technical point of view, a strong upward movement is maintained. The lower channel of the linear regression, the moving average line, and the Heiken Ashi indicator are directed upwards. Therefore, it is recommended to consider trading for an increase. The pair has worked out the Murray level of "5/8" - 1.1353, which gives some chances for a downward correction.

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The average volatility of the euro/dollar currency pair remains at record values for the euro currency and has increased to 128 points per day. And these values only once confirm that the markets are now excited and can move unexpectedly and sharply in any direction. Thus, on Monday, we again expect a decrease in volatility and movement within the channel, limited by the levels of 1.1156 and 1.1412.

Nearest support levels:

S1 - 1.1230

S2 - 1.1108

S3 - 1.0986

Nearest resistance levels:

R1 - 1.1353

R2 - 1.1475

R3 - 1.1597

Trading recommendations:

The euro/dollar pair continues its upward trend. Thus, now it is still recommended to trade "on trend". That is, to remain in the purchases of the European currency with the targets of 1.1353 and 1.1412 until the Heiken Ashi indicator turns down. 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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EUR/USD. Preview of the week. Eurozone GDP and industrial production may complete the euro's victorious march

24-hour timeframe

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The new trading week for the EUR/USD currency pair will be extremely interesting. In addition to all the fundamental background that is now available, the macroeconomic news calendar contains a lot of potentially important reports. Unfortunately, at this moment we can state a fact: market participants continue to ignore all incoming statistics, and it does not matter where it comes from, the United States or the European Union. Nevertheless, we are sure that, firstly, this cannot go on forever, and secondly, the euro/dollar pair now needs a downward correction after so much growth. Thus, the general recommendations to traders as a whole remain the same: we believe that we should not try to guess a strong trend reversal down; Do not open short positions on an upward trend; and even more so, not a single person in the world can now predict when the panic in all markets associated with the spreading coronavirus will end. Thus, all the economic information planned for the current week may well not cause any market reaction. Despite the fact that with a high degree of probability, this information will again not be in favor of the euro currency ...

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The trading week will begin cautiously with the release of the industrial production report in Germany. A negative was recorded for this indicator last month. At -6.8% in annual terms - this is exactly how much the fall in industrial production amounted to. Forecasts for the month of January are slightly better. Only a -4.5% y/y is expected and even +1.5% in monthly terms. However, a small increase after the strongest contraction (in monthly terms the indicator lost 3.5% in December) is hardly a sign of a recovery in the industry.

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The EU will publish the fourth quarter GDP indicator on Tuesday, the final value. Here, too, traders are unlikely to find something optimistic for themselves. According to experts, GDP will decline in growth rates from 1.2% in the third quarter to 0.9% y/y in the fourth. Thus, euro-bulls cannot expect anything optimistic in advance and on Tuesday. In general, the GDP indicator in the EU has only slowed down over the past two years and the mark of 0% is not far off.

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The inflation rate for February will be published in the United States on Wednesday (more detailed macroeconomic statistics from the US will be discussed in the GBP/USD article). The EU will release another important indicator on Thursday - industrial production for January. Given that another reduction is expected in the locomotive of the European economy of Germany, the picture does not differ as much in the EU. Forecasts indicate a decrease of another 3.4% in annual terms and an increase of 1.2% in monthly terms. However, as in the case of Germany, December was a failure in monthly terms, and an increase of 1.2% in January will not be able to offset these losses. The most interesting event of the day will be the ECB meeting, within which a decision can be made to lower the key rate. We do not believe that the rate in the EU should be reduced right now. In this matter, you should immediately find out why it can lower the ECB deposit rate? To fight the coronavirus, which hits the supply chain, on tourism? Or because macroeconomic statistics in the EU continue to slow down and worsen even without the influence of the coronavirus, despite all the previous manipulations of the central bank? Anyway, not all experts are certain that the ECB Monetary Committee will take this step in March. Forecasts predict either no changes, or a decrease of 0.1% to -0.6%. However, in almost any case, the ECB should not expect any hawkish actions or rhetoric. After the meeting, a press conference with the head of state, Christine Lagarde, will traditionally take place, and it is also unlikely that Lagarde will be optimistic during this event. Based on all of the above, euro buyers are unlikely to be lucky with the data on Thursday.

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The last trading day of the week will be marked by a report on inflation in Germany, which is likely to remain unchanged and will be +1.7% y/y. What can we say in general? Given the fact that the euro is firmly increasing and non-stop, the reasons for this growth are not statistics, a correction is inevitable, the euro's fall is also inevitable, but everything will now depend on the coronavirus, which is terrible for the markets with the panic that it can cause. If you remove the epidemic factor, what are the reasons for the European currency to show growth against the US dollar? Yes, the Fed lowered the rate by 0.5%, but this is clearly not enough for the euro to grow for two consecutive weeks at a record pace. Yes, stock markets in the United States have collapsed, oil has fallen in price, and business activity has declined, but these factors affect both the European Union and the euro. Thus, we believe that even with the presence of the Chinese virus, the euro did not have sufficient grounds for such a strong growth. Thus, after the markets calm down, we will again expect a strong decline in the quotes of the euro/dollar pair.

Recommendations for short positions:

To sell the euro on a 24-hour timeframe, we recommend waiting for the quotes to consolidate below the Kijun-sen line. To do this, the pair should go down to at least 1.1100. The first target for shorts is the support level of 1.0838.

Recommendations for long positions:

Euro-currency purchases with the target of the resistance level of 1.1470 can be held until the MACD indicator moves down on this chart or until the price consolidates below the Kijun-sen line on the 4-hour chart. We recall that European statistics remain extremely weak and are not the reason for the strengthening of the euro.

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.

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

Forecast for EUR/USD on March 9, 2020

EUR/USD

US employment data came out great on Friday. The growth in Nonfarm payrolls was 273 thousand with the revision of January data for an increase of 48 thousand, the unemployment rate fell from 3.6% to 3.5%, and hourly wages increased by 0.3%. The trade balance improved from -48.6 billion dollars to -45.3 billion. According to the first reaction of the market, the euro rose, as investors were still under the pressure of ideas about a double Fed rate cut on the 18th, but later market players decided to close positions, investors still had doubts about such a super-aggressive behavior from the US central bank, and the euro closed the day by 45 points growth.

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With the opening of a new week, after the release of Saturday's data on China's trade balance, the euro formed a rising gap of 68 points and further growth at the peak was 212 points. China's exports showed a decrease of 17.2% y/y, imports contracted by 4.0%, the total balance as a result was -7.09 billion dollars against expectations of 24.6 billion and 46.8 billion dollars in December.

The market is very overheated, which shows the extreme growth of the Marlin oscillator. We are waiting for the market to cool, the gap to close and a further decline to support the embedded price channel line in the region of 1.0980.

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The Marlin oscillator shows a reversal on the H4 chart.

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

Forecast for AUD/USD on March 9, 2020

AUD/USD

China's trade balance data for February came out on Saturday. China's exports fell by 17.2% y/y, imports contracted by 4.0%, and the total balance amounted to -7.09 billion dollars as against 24.6 billion and 46.8 billion dollars expected in December. But despite such an impressive drop, the data alone, without their correlation with other economic parameters, should not cause panic. The Chinese economy is characterized by recessions in January-February; the negative balance was in March 2018, in February 2017, in February 2014, in February 2013, in February 2011, etc. But investors believe that subsequent Chinese data will be very negative. From the first minutes of the opening of the Chinese market on Monday, the China A50 stock index lost 2.57%.

The Australian Volatility Index ASX200 (VIX) rose to its highest level since 2012, when the European debt crisis was raging with the collapse of the oldest banks in Spain and Cyprus. The Australian stock market (S&P/ASX 200) fell 6.19% today. Yields on Australian bonds from 3-year-olds to 30-year-olds fell to record lows on Monday: for 3-year bonds, the yield reached 0.326%, for 10-year bonds 0.550%.

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The Australian dollar experienced a crushing collapse of 320 points. After a few minutes, the price won back an 80% drop. But the further goal of the movement is nevertheless supporting the embedded line of the price channel in the region of 0.6230.

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On the four-hour chart, the MACD indicator line now acts as resistance at 0.6565. The release of the price above it will mean the aussie's intention to close the morning gap. But then we expect the price to fall to the designated target of 0.6230, only at a slower rate.

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

Forecast for USD/JPY on March 9, 2020

USD/JPY

Japan's fourth quarter GDP figures came out this morning. The Japanese economy lost 1.8% during this period, which, after a negative indicator in the third quarter (at -1.6%) means that the Japanese economy is entering a recession. On an annualized basis, GDP fell from -6.3% y/y to -7.1% y/y. Japanese stock index Nikkei 225 hit 6.00% in the morning. The USD/JPY pair fell by 360 points today.

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Further price cuts look no less dramatic. Its goal is to support the embedded line of the price channel in the region of 96.83, as can be seen on the chart of the weekly scale.

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The Marlin oscillator is in deep oversold on the daily chart. In this case, either a price correction or to continue the price fall with the growth of the oscillator, that is, in fact, computer indicators are disabled from extreme market volatility.

But the price has reached a powerful support level of 101.58. This is the peak of April 2009, the pivot point of the pair's 35-month decline in the period 2001-2004, the reversal after the 46-figure fall in 1998-1999, the peak of January 1995. To a greater extent, we expect a correction from this level and the closing of the gap, after which the dollar will again fall against the yen.

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On the H4 chart, the Marlin oscillator is still slightly moving up, which shows that the market is in thought.

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

GBP/CHF testing support, potential breakout!

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Trading Recommendation

Entry: 1.20656

Reason for Entry: 100% fibonacci extension

Take Profit : 1.16918

Reason for Take Profit: Horizontal swing low support

Stop Loss: 1.22556

Reason for Stop loss: Previous breakout level of 61.8% and 78.6% fibonacci extension

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

AUD/NZD approaching resistance, potential drop!

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Trading Recommendation

Entry: 1.04399

Reason for Entry: Horizontal overlap resistance

Take Profit: 1..04117

Reason for Take Profit: Horizontal swing low support

Stop Loss: 1.04648

Reason for Stop loss: Horizontal swing high resistance

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

AUD/USD counter trendline breakout. Further drop expected!

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Trading Recommendation

Entry: 0.66566

Reason for Entry: 38.2% Fibonacci Retracement, Descending trendline resistance.

Take Profit: 0.64345

Reason for Take Profit: Horizontal Swing Low

Stop Loss: 0.67335

Reason for Stop loss: 50% Fibonacci Retracement

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

AUD/USD counter trendline breakout. Further drop expected!

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Trading Recommendation

Entry: 0.66566

Reason for Entry: 38.2% Fibonacci Retracement, Descending trendline resistance.

Take Profit: 0.64345

Reason for Take Profit: Horizontal Swing Low

Stop Loss: 0.67335

Reason for Stop loss: 50% Fibonacci Retracement

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

AUD/USD counter trendline breakout. Further drop expected!

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Trading Recommendation

Entry: 0.66566

Reason for Entry: 38.2% Fibonacci Retracement, Descending trendline resistance.

Take Profit: 0.64345

Reason for Take Profit: Horizontal Swing Low

Stop Loss: 0.67335

Reason for Stop loss: 50% Fibonacci Retracement

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

Fractal analysis of the main currency pairs for March 9

Forecast for March 9:

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: 1.1503, 1.1419, 1.1359, 1.1280, 1.1242, 1.1183 and 1.1122. Here, we are following the local upward cycle of February 28. Short-term upward movement is expected in the range of 1.1359 - 1.1419. The breakdown of the last value will lead to a pronounced movement. Here, the target is 1.1503. We expect a pullback to the bottom from this level.

Short-term downward movement is expected in the range of 1.1280 - 1.1242. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 1.1183. 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. In this case, the goal is 1.1122.

The main trend is the local upward cycle of February 28

Trading recommendations:

Buy: 1.1360 Take profit: 1.1417

Buy: 1.1421 Take profit: 1.1503

Sell: 1.1280 Take profit: 1.1243

Sell: 1.1241 Take profit: 1.1184

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For the pound / dollar pair, the key levels on the H1 scale are: 1.3195, 1.3154, 1.3113, 1.3055, 1.3026 and 1.2981. Here, we are following the development of the ascending structure of February 28. The continuation of the movement to the top is expected after the breakdown of the level of 1.3113. In this case, the target is 1.3154. Price consolidation is near this level. For the potential value for the top, we consider the level of 1.3195. Upon reaching which, we expect a pullback to the bottom.

Short-term downward movement is possibly in the range of 1.3055 - 1.3026. The breakdown of the last value will lead to an in-depth correction. Here, the target is 1.2981. This level is a key support for the top.

The main trend is the upward cycle of February 28.

Trading recommendations:

Buy: 1.3113 Take profit: 1.3152

Buy: 1.3155 Take profit: 1.3193

Sell: 1.3055 Take profit: 1.3027

Sell: 1.3024 Take profit: 1.2981

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For the dollar / franc pair, the key levels on the H1 scale are: 0.9423, 0.9372, 0.9330, 0.9266, 0.9211, 0.9178 and 0.9104. Here, we are following the local descending structure of March 4. The continuation of movement to the bottom is expected after the breakdown of the level of 0.9266. In this case, the target is 0.9211. Price consolidation is in the range of 0.9211 - 0.9178. For the potential value for the bottom, we consider the level of 0.9104. Upon reaching this level, we expect a pullback to the top.

Short-term upward movement is possibly in the range of 0.9330 - 0.9372. The breakdown of the latter value will lead to an in-depth correction. Here, the target is 0.9423. This level is a key support for the downward structure.

The main trend is the local descending structure of March 4

Trading recommendations:

Buy : 0.9330 Take profit: 0.9371

Buy : 0.9373 Take profit: 0.9421

Sell: 0.9264 Take profit: 0.9211

Sell: 0.9177 Take profit: 0.9105

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For the dollar / yen pair, the key levels on the scale are : 105.73, 104.96, 104.45, 103.20, 102.55 and 101.90. Here, we are following the development of the local descending structure of March 3. Short-term downward movement is expected in the range of 103.20 - 102.55. Hence, the high probability of a reversal to the top. The breakdown of the level of 102.55 will allow you to count on movement to a potential target of 101.90.

Short-term upward movement is possibly in the range of 104.45 - 104.96. The breakdown of the latter value will lead to an in-depth correction. In this case, the target is 105.73. This level is a key support for the downward structure.

Main trend: local descending structure of March 3

Trading recommendations:

Buy: 104.45 Take profit: 104.95

Buy : 104.98 Take profit: 105.73

Sell: 103.20 Take profit: 102.57

Sell: 102.53 Take profit: 101.90

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For the Canadian dollar / US dollar pair, the key levels on the H1 scale are: 1.3643, 1.3578, 1.3545, 1.3509 and 1.3438. Here, we are following the ascendant structure of March 3. At the moment, we expect a significant rollback to the correction. A short-term downward movement is possibly in the range of 1.3578 - 1.3545. The breakdown of the last value will lead to an in-depth correction. Here, the target is 1.3509. This level is a key support for the correction zone. Its passage through the price will lead to a pronounced downward movement. Here, the potential target is 1.3438.

For an upward movement, the breakdown of the level of 1.3643 should be accompanied by an unstable development of the trend until we consider further goals.

The main trend is the upward structure of March 3

Trading recommendations:

Buy: Take profit:

Buy : Take profit:

Sell: 1.3578 Take profit: 1.3545

Sell: 1.3543 Take profit: 1.3510

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For the Australian dollar / US dollar pair, the key levels on the H1 scale are : 0.6728, 0.6701, 0.6667, 0.6649, 0.6623, 0.6602 and 0.6574. Here, we are following the development of the upward cycle of February 28. Short-term upward movement is expected in the range of 0.6649 - 0.6667. The breakdown of the latter value will lead to a pronounced movement. Here, the target is 0.6701. Price consolidation is near this level. For the potential value for the top, we consider the level of 0.6728. Upon reaching which, we expect a pullback to the bottom.

Consolidated movement is possibly in the range of 0.6623 - 0.6602. The breakdown of the last value will lead to an in-depth correction. Here, the target is 0.6574. This level is a key support for the top.

The main trend is the upward cycle of February 28

Trading recommendations:

Buy: 0.6650 Take profit: 0.6665

Buy: 0.6668 Take profit: 0.6701

Sell : 0.6623 Take profit : 0.6604

Sell: 0.6601 Take profit: 0.6576

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For the euro / yen pair, the key levels on the H1 scale are: 119.60, 119.31, 118.87, 118.51, 117.90, 117.37, 117.01 and 116.35. Here, we are following the descending structure of March 3. The continuation of the movement to the bottom is expected after the breakdown of the level of 117.90. In this case, the target is 117.37. Price consolidation is in the range of 117.37 - 117.01. For the potential value for the bottom, we consider the level of 116.35. Upon reaching which, we expect a pullback to the top.

Short-term upward movement is possibly in the range of 118.51 - 118.87. The breakdown of the last value will lead to an in-depth correction. Here, the target is 119.31. The range of 119.31 - 119.60 is a key support for the downward structure. We expect the initial conditions for the upward cycle to be formed before it.

The main trend is the descending structure of March 3

Trading recommendations:

Buy: 118.51 Take profit: 118.87

Buy: 118.88 Take profit: 119.30

Sell: 117.90 Take profit: 117.38

Sell: 117.35 Take profit: 117.02

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For the pound / yen pair, the key levels on the H1 scale are : 137.28, 136.70, 136.31, 135.55, 135.01, 134.28 and 133.82. Here, we are following the local descending structure of March 2. The continuation of movement to the bottom is expected after the breakdown of the level of 135.55. Here, the goal is 135.01. Price consolidation is near this level. The breakdown of the level of 135.00 will lead to a pronounced downward movement. Here, the goal is 134.28. For the potential value for the bottom, we consider the level of 133.82. Upon reaching which, we expect consolidation, as well as a rollback to the top.

Short-term upward movement is possibly in the range of 136.31 - 136.70. The breakdown of the latter value will lead to the development of an in-depth correction. Here, the goal is 137.28. This level is a key support for the downward cycle.

The main trend is the local descending structure of March 2

Trading recommendations:

Buy: 136.31 Take profit: 136.70

Buy: 136.72 Take profit: 137.28

Sell: 135.55 Take profit: 135.01

Sell: 134.98 Take profit: 134.30

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

GBP/USD. Trumps of the pound and the dollar's hopeless prospects

The pound ended the trading week on a major note: paired with the dollar, the pound was able to return to the area of the 30th figure, after falling to around 1.2725 at the end of February. Such dynamics is explained not only by the weakness of the US currency. The buyers of GBP/USD gave a rather positive assessment of the first results of the negotiation process between Brussels and London, although representatives of the parties announced serious disagreements that could not be overcome yet. Nevertheless, the negotiators also voiced encouraging theses - it was on them that the market focused its attention.

In particular, the head of the European delegation Michel Barnier expressed confidence that they will be able to negotiate with the UK, despite the "very, very serious disagreements." He noted that the parties initially had completely different positions on key issues, so these differences in views were not a surprise to anyone. Nevertheless, he was optimistic about the prospects for negotiations.

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The market seized on this phrase, although it is actually unclear how the parties plan to find a common denominator. Barnier named four points on which there are serious differences. According to him, if no compromise is reached on these issues, an agreement is unlikely to be signed.

First, it is about maintaining European standards that would guarantee equal trading opportunities. At the moment, London does not want to oblige itself to comply with these standards, and most importantly, it is opposed to the creation of appropriate mechanisms that could monitor the situation and record "unjustified commercial advantages".

Secondly, the British refuse to recognize not only the jurisdiction of the European Court of Justice, but also the European Convention on Human Rights and the rules for the exchange of data. As Barnier noted, if the parties do not come to an understanding on this item, then further cooperation in this area will be "carried out in accordance with the norms of world law". Here you can also mention the contradictions in the field of law enforcement: we are talking about coordinated actions to combat terrorism, financial crime, organized crime and so on.

Another contradiction is more fundamental. We are talking about the legal basis for future relationships. Britain plans to enter into several agreements – in every area where this is necessary. Brussels insists on signing a single, comprehensive agreement. In addition, the UK does not want to agree to common terms for both sides in the deal.

And the last, fourth, disagreement is about fishing. London insists that fishing matters be discussed on a regular basis, that is, annually. On the contrary, Europeans want to include fishing in the structure of the general economic agreement. According to Barnier, the British position on the issue of fishing is "unacceptable".

As you can see, the positions of the parties are still at different poles, and the first round of negotiations was inconclusive. But the market nevertheless "trusted" Barnier's optimism, which expressed confidence that Brussels and London would still come to a common opinion on all key issues.

It is worth noting that last week, figuratively speaking, Brexit "did not prevent" the GBP/USD from growing, while the main driving force of the upward movement was the dollar, which swooped down on all fronts. Yesterday, the Federal Reserve Bank of New York significantly lowered its forecasts for US GDP growth in the first quarter of this year. While the previous estimate was at 2.15%, expectations have now dropped to 1.7%. Comments from Donald Trump's economic adviser, Larry Kudlow, also put pressure on greenback. According to him, certain sectors of the US economy will feel the "strong negative impact" of the epidemic, but it is "too early" to make decisions about supporting the economy with fiscal measures. At the same time, Trump himself is demanding that the Fed should hold another round of rate cuts.

In this case, we can talk about a certain de-correlation. For example, if the head of the Bank of England (Andrew Bailey) insists on applying fiscal responses, the White House is trying to offset the impending threat with monetary policy. And the Fed seems to agree with this scenario. At least, the latest comments from the Fed representatives (Bullard, Kaplan) indicate a willingness to further soften monetary policy. While representatives of the BoE and the ECB are increasingly reminded that they are limited in their actions – in particular, Bailey allowed a rate cut to 0.1%, but at the same time excluded the option of reducing to a negative area.

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Thus, the pound is still in a winning position relative to the US currency. According to general market expectations, the Fed will lower the rate by another 25 basis points at the March meeting, and later, by another 25 basis points by the beginning of summer. In turn, the BoE can maintain a wait-and-see attitude on March 26, saving an arsenal of available actions for the future. Such a de-correlation provides support for GBP/USD, especially against the background of quite calm rhetoric of the Brexit negotiators. If this fundamental background for the dollar and the pound persists next week, the pair can test the next resistance level, which is located at 1.3105 - this is the lower boundary of the Kumo cloud on the daily chart.

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