Hot forecast for GBP/USD on 03/11/2020 and trading recommendation

The pullback was inevitable, if only for the simple reason that the pound was growing quite strongly for five consecutive days, and for no apparent reason. However, the rate at which the pound was losing its ground yesterday causes slight confusion. There is no single reason for such a rapid collapse of the pound. This is a combination of several factors at once. First, the pound was heavily overbought, but this is never a sufficient reason. Secondly, US stock indices began to move away from the shock caused by a sharp collapse in oil prices. Thirdly, the increasing panic due to the coronavirus hit the UK hard, especially amid reports that the United Kingdom's deputy secretary of health was among the infected. Well, against the background of all this, the notorious overbought pound became only an amplifying factor.

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The scale of the decline was so impressive that the pound itself was locally oversold, and there are signs, so to speak, of the rebound after the rebound. Nevertheless, this obviously will not last long, since today, extremely important macroeconomic data will be published in the UK. In particular, the fourth quarter GDP totals will almost certainly show that economic growth slowed from 1.2% to 0.8%, which clearly does not add optimism, as the risks of a slide into recession are increasing. In addition, the growth rate of industrial production, or rather decline, may accelerate from -1.8% to -2.7%. Equally important, the trade deficit should reach -3.7 billion pounds. But in the previous month, the trade surplus amounted to 7.7 billion pounds. Therefore, the forecasts are clearly not impressive, and they will most likely be confirmed. And against this background, the pound will clearly continue its decline.

GDP growth rate (UK):

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However, the pound will make a new attempt to grow in just a couple of hours. The reason will be inflation data in the United States, where it should decline from 2.5% to 2.3%. If we add to this the rumors that the Federal Reserve System may lower the refinancing rate once again, then the slowdown in inflation will be perceived as a clear confirmation of such thoughts. Well, such fears themselves will have a clear negative impact on the dollar.

Inflation (United States):

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In terms of technical analysis, we see an impulse downward move, where the quote for the day flew more than 200 points, returning us to the area of 1.2900. In fact, we have regular speculations against the background of an earlier warm- up, where the quote locally demonstrated a correction of more than 50%.

Considering the trading chart in general terms, we see that the stop of the past day coincided with a slowdown on February 10 and 20, where the quote systematically found a foothold for the subsequent regrouping of trading forces.

It is likely to assume that the speculative mood will continue in the market, where the main pivot point is in the region of the level of 1.2770. It is worth considering that when publishing data on inflation, we can see a reverse move, focusing the quote on the main borders of the 1.2770 / 1.3000 range.

Concretizing all of the above into trading signals:

- Long positions are considered depending on the deceleration point: the first option is calculated based on the fact that the existing impulse has already played a downward move, and the price goes into the deceleration stage, where the entry point is higher than 1.2950;

- The second option is considering a further decline, where there is a slowdown in the region of 1.2770 / 1.2800, relative to which the work is being done to buy.

- Short positions are looking towards 1.2800.

From the point of view of a comprehensive indicator analysis, we see that the indicators of technical instruments have changed due to the recent impulse move, where the minute and hour periods are concentrated on the sale, and the daily sections have taken a neutral position.

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Fed's speed of taking stabilization measures and their effectiveness will keep markets from falling into chaos (we expect

The situation in the global markets has somewhat stabilized after the collapse of "Black Monday". The question arises as to whether the panic mood will come back again for a long time, accompanied by regular sales of risky assets, growing demand for protective financial instruments and a weakening US dollar.

Of course, such risks are present. The decision of the U.S. Department of Energy to start selling oil from strategic reserves, the expected reduction in interest rates at the Fed meeting in March and an increase in the repurchase of U.S. Treasury bonds to support liquidity in the national financial system will put pressure on the US dollar, which has recently been in a tough position.

On the one hand, the panic surrounding the situation with coronavirus has a negative impact on the growth of the American economy, which was the trigger that led to its depreciation amid the collapse of treasury earnings. On the other hand, as a result of this, the Fed's subsequent actions, the expansion of incentives to $ 100 billion a month, and D. Trump's appeal "to lower the base interest rate to the level of competing countries" became another factor of its weakness.

But in fairness, it should be noted that the rival dollar currencies will also definitely be under pressure due to the actions of the Central Bank. If we talk about the main currencies traded against the dollar, then the regulators of the countries to which they belong will try to lower their rate so that the economies of these countries can confidently compete with American exports in the world market. The RBA, the Central Bank of Canada, and the Fed have already cut back the previous levels of their interest rates. The same is expected from the Bank of England. There is also discussion in the market that the ECB, whose key interest rate is already at zero, can follow the Japanese example and make it negative. The German Deutsche Bank believes that the rate may decline to -0.5% or even to -0.6%. By the way, many investment banks believe that the Federal Reserve may also decide to set a negative level of interest rates in order to stop the panic in the markets.

In this situation, the obvious "weakness" of the dollar will be offset by the same "weakness" from competing currencies, which means that we should not expect its global decline.

In general, observing what is happening in the markets, we can say that on Tuesday, there was just a respite as we previously thought. Moreover, a lot will depend on the speed of rescue measures, primarily the Fed and the US financial bloc as a whole. If everything is done promptly, we believe that the current levels in the stock markets will become a local "bottom", and the previously noticeable drop in the dollar will stop.

Forecast of the day:

EUR/USD is trading below the level of 1.1370. In case that it fails to break through it, it will lead to the resumption of falling prices to the level of 1.1215.

Gold is trading in the range of 1645.60-1666.90. We believe that only a break in this range can contribute to either an increase in the price to 1688.15, or, conversely, to its decline to 1611.35. We are more inclined to the second option, which will only happen if the situation in the markets stabilizes.

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Technical analysis of GBP/USD for 11/03/2020:

Technical Market Overview:

All the yesterday's target for the corrective wave down had been hit, but the bears were relentless and pushed the price even lower towards the level of 1.2848. This technical support level corresponds with a main channel lower line, so the price might get some support here and bounce. The overall corrective cycle had been very aggressive so far and it might last a little bit longer as the market is not in oversold conditions just yet. The next target for bears is seen at the level of 1.2823 and 1.2786.

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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Technical analysis of EUR/USD for 11/03/2020:

Technical Market Overview:

The EUR/USD pair had retraced 50% of the last wave up after the series of Pin Bar candlestick patterns were made around the level of 1.1497. This signal and a clear bearish divergence between the price and momentum oscillator in overbought market conditions resulted in a move lower. The next target for bears is seen at 61% of Fibonacci retracement located at the level of 1.1248. The nearest technical resistance is seen at the level of 1.1361 and 1.1406.

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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GBP/USD: plan for the European session on March 11. Pound is losing ground ahead of annual budget release, which will be

To open long positions on GBP/USD you need:

The British pound continued to decline during the US session on Tuesday after there was talk that the UK's annual budget could be revised due to the spread of coronavirus, which would delay the increase in investment plans that the UK government had recently mentioned. The publication of the budget is scheduled for today. Buyers of the pound need an urgent return of resistance 1.2951, as only the continuation of the upward correction depends on it, after yesterday's major fall. If this can be done, we can expect a test of highs 1.2996 and 1.3044, where I recommend taking profits. In the scenario of the pair returning to support 1.2906, which is still intermediate, it is best to return to long positions only after updating the low of yesterday at 1.2870, subject to the formation of divergence on the MACD indicator. If there is no bullish activity in this range, then I recommend that you postpone purchases until the test of the lows of 1.2833 and 1.2798.

To open short positions on GBP/USD you need:

Sellers will try to form a false breakout in the resistance area of 1.2951 today in the morning, which will be the first signal to open short positions. This will lead to the return of GBP/USD and consolidation below the support of 1.2906, which will increase the pressure on the pair and allow us to re test the low of 1.2870. However, the longer-term goal of the bears will be to support 1.2833, where a bullish divergence can be formed on the MACD indicator . Therefore, I recommend taking profits on short positions there. If the pound grows above the resistance of 1.2951, it is best to return to short positions at the test of the high of 1.2996, where the moving average also passes, or to rebound from the resistance of 1.3044.

Signals of indicators:

Moving averages

Trading is conducted below 30 and 50 moving average, which indicates a downward trend reversal.

Bollinger bands

In the event of a decline, support will be provided by the lower boundary of the indicator at 1.2833, while an unsuccessful attempt to go above the average boundary of the indicator at 1.2951 will be a sell signal. Otherwise, you can sell GBP/USD immediately on the rebound from the upper boundary in the area of 1.3044.

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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 11. Euro weakens as ECB meeting approaches. Bears need 1.1280 level

To open long positions on EURUSD, you need:

Yesterday's data on the eurozone economy did not impress traders much, as it has long been clear that significant stimulus measures are required from the European Central Bank in order to resume growth. Most likely, this will be announced at the meeting that will be held tomorrow. For this reason, the pressure on the European currency remains, but buyers can take advantage of the pair's decline in hopes of resuming growth. The level of 1.1279, which I paid attention to yesterday in my forecast for the second half of the day, worked well, and buyers returned to the market. At the moment, the bulls will focus on the breakout and consolidation above the resistance of 1.1340, which will strengthen their positions and lead to an update of the highs of 1.1390 and 1.1422, where I recommend profit taking, since large sellers will start operating in this area. In the scenario of a further decline in EUR/USD in the first half of the day, it is best to return to long positions only on a false breakout in the support area of 1.1279, since confidence in this level is much less than yesterday, or buy the pair immediately on a rebound from the lows of 1.1239 and 1.1195.

To open short positions on EURUSD, you need:

The bears reached their target at 1.1279 and retreated from the market. At the moment, you can count on their return after forming a false breakout in the resistance area of 1.1340, but the attempt to form the upper boundary of a new downward channel will most likely be postponed until the highs of 1.1390 and 1.1422 are updated, from where you can sell the euro today immediately on a rebound. An equally important task for the bears will be to return and consolidate below the support of 1.1279, which will increase the pressure on the pair and lead to the renewal of new local lows in the area of 1.1239 and 1.1195, where I recommend taking profits. Important fundamental statistics will not be released in the first half of the day, so the entire focus will shift to the US session and the US inflation report.

Signals of indicators:

Moving averages

Trading is carried out below 30 and 50 moving average, which saves the likelihood of further downward correction in the pair.

Bollinger bands

In the morning, the downward movement can be limited in the area of the lower boundary of the indicator 1.1279, while the bears will show themselves after updating the upper level, which is now located in the 1.1290 area.

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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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Gold - take profit!

The buyers' trap closed last night.

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Good day, dear traders! I congratulate those who followed our trading idea yesterday to sell gold: https://www.instaforex.org/en/forex_analysis/246662

Recall that the idea was to close any inter-day deals, presented in the form of a "buyers' trap" at the quote of 1640:

Plan:

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Adjustment:

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Good luck in trading and control your risks!

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UK seismic collapse in pensions

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On Wednesday, the budget is expected to announce a change in inflationary measures, which will have significant consequences for British pensions.

In anticipation of the budget, Jos Vermeulen, senior pension strategist at Insight Investment, said: "A seismic change in pensions is expected, and if left unchecked, it could negatively affect the pension savings of millions of ordinary members of the pension system and the levels of financing of pension schemes. More than 10 million participants in defined benefit pension schemes will be affected by the proposed changes to the underlying retail price index (RPI) calculation."

If the RPI (retail price index) is subject to a simple correction, as currently proposed, the value of the associated RPI may drop to 20%.

"It would also lead to the transfer of wealth from £90 billion to £120 billion from holders of bond-related indexes - predominantly British pension funds and insurers to the UK government. Pension funds were indebted to reduce risk by hedging long-term liabilities, which ultimately strengthened the UK's financial stability. They did so in good faith, based on a clear and consistent message that the RPI calculation methodology will not change." Vermuelen added.

A proposal to reform the retail price index, in bringing it into line with the consumer price index, including housing costs for homeowners, will be considered on March 11.

The government seems to have decided to make these amendments to the basic RPI calculation. The proposal is to align the consumer price index, including housing costs for homeowners, based on the average difference between the two inflation rates since 2010, which will lead to a decrease in the RPI yield by 1% per year.

Attention will be paid to the timing of the change, not the economic impact.

"We urge all UK pension funds, insurers, consultants and asset managers to engage with politicians now to organize the upcoming reform.

With your help, we can protect the value of assets and retirement income on which millions of people depend now and for decades to come," was the appeal of the UK government.

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Trading plan for EUR/USD on March 11, 2020 The coronavirus epidemic is growing. The ECB made a statement before its scheduled

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The markets relaxed on Tuesday, as oil and the US market rose correctively.

The main driver of the movement is the coronavirus.

Latest news: There are already 36,000 cases outside of China. Patients increase more than 10% per day.

The most difficult situation at the moment is in Italy, with more than 10,000 cases recorded. As a result, the country is now in quarantine.

Although South Korea has 7.5 thousand cases, the situation is already improving there. Meanwhile, Iran has more than 7,000 cases.

Both Germany and France have more than 1,000 patients. New foci: US and Spain - with more than 1,000 patients each.

Israel, on the other hand, has introduced a full quarantine for all those entering the country, without exceptions.

As we can see, the situation in Europe is difficult.

The ECB issued a short statement saying that it is monitoring the situation, and is ready to take any action to support the economy. The ECB's meeting will happen tomorrow, Thursday, March 12. It is very possible that the ECB will offer a liquidity injection.

EUR/USD: a deep correction has taken place.

Keep purchasing from 1.1100.

Buy from 1.1200.

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Indicator analysis. Daily review of EUR/USD on March 11, 2020

Trend analysis (Fig. 1).

Today, from the historical support level of 1.1292 (blue dotted line) the price may begin to move up with the first target at the support line 1.1348 (white bold line). From this line, it is possible to continue the upward movement with the target of 1.1458, a retracement level of 38.2% (red dashed line).

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Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - up;

- Fibonacci levels - up;

- Volumes - up;

- Candlestick analysis - down;

- Trend analysis - down;

- Bollinger Lines - up;

- Weekly schedule - up.

General conclusion:

Today, from the historical support level of 1.1292 (blue dotted line) the price may begin to move up with the first target at the support line 1.1348 (white bold line). Upon reaching this line, the continuation of the upward movement is possible with the target of 1.1458, a retracement level of 38.2% (red dashed line).

An unlikely scenario: from the support line 1.1350 (white bold line), work down with the target of 1.1223, a pullback level of 38.2% (blue dashed line).

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GBP/CHF price movement for March 11, 2020

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The GBP/CHF pair is moving in a market maker sell model pattern. It is trying to reach the previous bullish fair value gap at 1.1967-1.1999. If this scenario comes true, the GBP/CHF pair may reach the next target at 1.1850. As long as GBP/CHF does not retrace, it is likely to grow to 1.2334.

Overall the bias from GBP/CHF is Bearish.

(Disclaimer)

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Forecast for EUR/USD on March 11, 2020

EUR/USD

At a time when, seemingly, in China, the victory over coronavirus is close, the number of infected people increased by 30% in Europe in one day(!). According to the latest data in Italy, 463 dead and 9172 infected (724 recovered). In Italy, entry and exit from the country have now been prohibited. The number of cases are as follows: 30 dead and 1231 infected in Spain, while 30 dead and 1412 infections in France. The situation is better in the United States: 27 dead and 702 infections.

Yesterday it became known that US Treasury Secretary Stephen Mnuchin began to hold daily meetings with Fed Chairman Jerome Powell. It is very likely that politicians are preparing new incentives for the economy, perhaps even a full-fledged QE. The general situation is not in favor of the euro. Even yesterday, European stock indices ended with a huge negative, and US indices in a firm positive: EuroStoxx50 -1.66%, DAX -1.41%, Spanish IBEX35 -3.21%, Dow Jones 4.89%, Nasdaq 4.96 %

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The euro lost 160 points on Tuesday, Monday's gap is closed. The price is now facing a signal support of 1.1240 ( the high on December 31), the overcoming of which opens the way to the MACD line on the daily scale chart (1.1085).

The MACD line (1.1235) is located near the signal level on the four-hour chart, which raises its significance. Consolidation under the MACD line opens up a short-term prospect of a decline. Price taking at 1.1085 (the MACD line on daily) opens up a medium-term prospect of a decline.

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Forecast for AUD/USD on March 11, 2020

AUD/USD

Yesterday, Australian Prime Minister Scott Morrison expressed concern about the stronger impact on the Australian economy of an outbreak of coronavirus than it was from the US crisis in 2008. The government is preparing multi-billion dollar incentive measures. But while the package is being prepared, under the influence of the general strengthening of the US dollar, the aussie lost 93 points yesterday. Today, the Australian stock index S&P/ASX 200 is down 2.13%. The Westpac March Consumer Sentiment Index fell 3.8% versus a -0.4% forecast.

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The Marlin oscillator is in a downward position on the daily chart, the price is trying to maintain the embedded price channel line at 0.6440, which is near the February 28 low. Overcoming the support opens the 0.6295 target - the Fibonacci reaction level is 123.6%.

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The price has consolidated under both indicator lines on the four-hour chart, the red balance line, which shows the priority of market sentiment and the blue MACD line, which is an indicator of the trend. The Marlin oscillator is developing in the zone of negative values. We are waiting for the development of a downward trend. The immediate task for the aussie is to consolidate under the level of 0.6440.

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Forecast for USD/JPY on March 11, 2020

USD/JPY

The Japanese yen, as a safe haven currency, but at the same time driven by the stock markets, has recently been in a difficult situation. There are 1277 recorded cases of coronavirus infection (19 dead) in Japan itself. The Japanese Parliament yesterday gave the Prime Minister the power to declare a state of emergency, which includes the cancellation of classes in schools, a ban on mass events, and the creation of operational medical facilities in buildings and on private land without their consent.

The USD/JPY pair rose 300 points yesterday with the close of Monday's gap following the growth of the US stock market (S&P 500 4.94%), but the Japanese market itself is under pressure due to economic recession (GDP shows a decline in the last two quarters). The Nikkei 225 is losing 1.15% today in the Asian session.

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The price is the upper shadow of yesterday's candle above the price channel line on the daily chart. There is a decline in prices from this line this morning. The resumption of growth is now possible after breaking yesterday's high. The goal in this case will be the nearest embedded price channel line in the area of 107.13.

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On a four-hour chart, the condition for further decline will be the Marlin line crossing the boundary with the bears' territory. On the price chart, this indicator's transition to the negative area corresponds to the signal level of 103.70. The immediate goal in this scenario is to support the price channel line in the area of 102.94, then support the lower line in the area of 100.84 (daily chart).

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Overview of the GBP/USD pair. March 11. The "swing" turned into a "roller coaster". Important statistics in the UK

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) - downward.

CCI: -42.2616

The British pound, which recently showed some signs of logic in its movements, fell down by 200 points yesterday. On the one hand, this is logical, since we still believe that the panic mood of traders and investors can not be the basis for the growth of a particular currency. Thus, now the pound simply "returns debts" to the US currency. No more. On the other hand, why did the fall start on Tuesday? Why is it so strong? After all, no emergency information was available to traders on this day. Thus, the situation has turned from a classic "swing" into a "roller coaster". The principle is the same, only the movements are stronger. Accordingly, it is extremely difficult to predict anything for the pound/dollar pair at the moment. Tomorrow, the price may turn up again and calmly pass 100-150 points. Macroeconomic statistics, as in the case of the euro currency, are completely ignored, although today, March 11, there will be a lot of important economic information for the GBP/USD pair.

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We have already discussed American statistics in the article on EUR/USD. This article focuses on British statistics. First, I would like to note the annual growth rate of GDP, according to the Office for National Statistics. According to the latest data, GDP is 1.2% y/y in December 2019. In January 2020, its growth rate may decrease to 0.8%-0.9% in annual terms and show an increase of no more than 0.2% on a monthly basis.

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According to the National Institute of Economic and Social Research, the GDP growth rate in February will be only 0.1%, which is even good, compared to zero in January.

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Well, the last and most important report from Albion is industrial production. In December 2019, a decline of 1.8% y/y was recorded, and in January 2020, -2.6 -2.7% y/y is expected. Thus, one of the key indicators of the state of the economy is likely to remain in a deplorable state. Judging by the forecast values, the British currency will not receive any support on March 11. However, as we have already said, it is not a fact that it will need this support, but at least some attention will be paid to the reports. Market participants now most expect decisions from the Bank of England, which must either confirm the universal desire of the world's central banks to hedge against a new crisis or refute it. Perhaps it is the immutability of the key rate in conditions when the Fed immediately reduces it by 0.5% that can become the strongest bullish factor for the British pound. If the British Regulator makes such a decision, we will begin to suspect even more strongly that in the case of the Fed's actions, "everything is not clear". Thus, much will depend on the actions of the ECB and the Bank of England in the near future for the euro and the pound in pairs with the US currency. We believe that the Fed's actions are now aimed not at fighting the "coronavirus", but at reducing the US dollar. At least, there are suspicions. However, in pair with the pound, the US dollar has almost returned to the position of a week ago, before the panic in the markets.

From a technical point of view, the quotes of the pound/dollar pair have fixed back below the moving average line. Thus, the trend has changed again, this time to a downward one. Both linear regression channels continue to be directed downward, which indicates a long-term downward market sentiment. It is very difficult to trade and forecast when the pair regularly changes direction, but there is no clear trend as such. However, these are the realities now for the British pound. Statistics on Wednesday, by the way, will show whether the market has returned to a more or less normal state for itself?

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The average volatility of the pound/dollar pair over the past 5 days is 142 points and continues to grow. The last two trading days were all-time highs for the pound. On Wednesday, March 11, we expect the pair to move within the volatility channel of 1.2753-1.3037. The pair is likely to move towards the lower border, but we remind you that fairly strong growth can now begin within the framework of the "swing". Especially if market participants continue to ignore any macroeconomic statistics.

Nearest support levels:

S1 - 1.2878

S2 - 1.2817

S3 - 1.2756

Nearest resistance levels:

R1 - 1.2939

R2 - 1.3000

R3 - 1.3062

Trading recommendations:

The GBP/USD pair abruptly resumed a strong downward movement. Thus, it is now relevant to sell the pound with targets of 1.2817 and 1.2756, before the Heiken Ashi indicator turns up. It is recommended to return to purchases of the British currency with the targets of 1.2817 and 1.2756 if traders break the moving average line again. We remind you that in the current conditions, opening any positions is associated with increased risks.

Explanation of the illustrations:

The highest linear regression channel is the blue unidirectional lines.

The lowest linear regression channel is the purple unidirectional lines.

CCI - blue line in the indicator window.

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

Murray levels - multi-colored horizontal stripes.

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

Possible variants of the price movement:

Red and green arrows.

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Overview of the EUR/USD pair. March 11. Trump continues the war with the Fed and Powell and makes a new batch of "loud" promises

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) - up.

CCI: 17.9996

The third trading day of the week begins with a strong downward movement that began the day before. However, according to the "linear regression channels" trading system, this movement is still characterized as a downward correction within the framework of an upward trend. The moving average line has not been worked out yet, but it can keep the price above itself and keep the upward trend. It is still difficult to say what to expect from the behavior of the EUR/USD currency pair. After such a strong upward movement, we can now expect an equally strong downward movement, at least as part of the correction. After completely ignoring the macroeconomic statistics in the last 10 days, we can expect the same reaction from traders on Wednesday, March 11. And on this day, traders will have something to pay attention to.

First, a press conference of the working group on "coronavirus" will be held in America at night. Clearly, traders will get new information about how the US plans to fight the epidemic and what measures will be taken. Again, it is difficult to say whether this information will be followed by any reaction of traders, but this information is extremely important at the present time.

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Second, US inflation will be published today. As we have already said, almost all statistics, wherever they come from, are now ignored by market participants. However, we continue to lean towards the option that the Fed was very hasty in lowering the key rate immediately by 0.5%. Moreover, we believe that Donald Trump took a direct part in making this decision, as the most interested person in lowering the key rate as quickly as possible and as low as possible. The official position of the Fed is to prevent the negative impact on the economy due to the "coronavirus". However, in our humble opinion, if the virus cannot be localized and stopped from spreading, then no monetary or financial measures will help any economy in the world. Today we will be able to find out whether there is any negative impact of what is happening in the world on inflation in the States? The so-called core inflation rate is expected to remain unchanged. It has been stable at 2.3% y/y for the past four months. This indicator does not take into account changes in energy prices (which is very important when the price of oil has collapsed) and food. According to forecasts, we can say that they are now quite formal, because if there is an impact of the epidemic, then most likely inflation will slow down.

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The second indicator of inflation (the main one) has accelerated to 2.5% y/y in recent months, but in February it is expected to slow down to 2.2% y/y. For the US, this decline is not critical, since the indicator will remain above the Fed's target level of "2% or higher". However, perhaps the consumer price index will slow down more? And at the end of March, it may fall again due to the strongly fallen oil prices. On the other hand, the Fed has eased monetary policy, so it is not known what will happen to this indicator.

Also, a topic for discussion now is Trump's "loud" statements that the country can reduce taxes for Americans on wages. Given Trump's love of populism, his sincere belief that everything that has happened to America in the past three years is solely his merit, given his statements on the "coronavirus", which have already been criticized by representatives of the medical sphere, it is already possible to assume that the American President will try to show the public everything in this topic as if he defeated the virus or did everything necessary to overcome the epidemic. In general, we should expect new "high-profile" statements from the US leader in the near future. Official information suggests that there are no special reasons to reduce taxes for US citizens. Trump said he would discuss the issue with Congress and the Senate. However, it is Congress that will initially vote for Trump's proposal. And the President doesn't have a majority in Congress. Moreover, the number of people infected in the United States does not exceed one thousand now. What are a thousand people for a multi-million country? Because of 1,000 people, Trump wants to lower taxes for everyone? It even sounds a little absurd. At the same time, the US leader continues to criticize the Fed, feeling the weakness of the organization at this time. As usual, via Twitter. "Our pathetic, slow-moving Fed, led by Jerome Powell, which raised the rate too quickly and lowered it too late, should lower it to the level of our competing countries. They now have up to two points of advantage and even more help from the currency!" Trump wrote.

From a technical point of view, the correction may end near the moving average. We still believe that more attention should now be paid to technical factors since the macroeconomic background changes too often and too sharply.

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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 140 points per day. And these values only confirm once again that the markets continue to be in an excited state and can move unexpectedly and sharply in any direction, which, in fact, showed yesterday. Thus, on Wednesday, we again expect a decrease in volatility and movement within the channel, limited by the levels of 1.1146 and 1.1426.

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 started a downward correction. Thus, now it is still recommended to trade "on trend", that is, to buy the European currency with the targets of 1.1426 and 1.1475 after the Heiken Ashi indicator turns up or after a rebound from the moving average. You can sell the pair after fixing the price below the moving average line with the first target of 1.1146.

Explanation of the illustrations:

The highest linear regression channel is the blue unidirectional lines.

The lowest linear regression channel is the purple unidirectional lines.

CCI - blue line in the indicator window.

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

Murray levels - multi-colored horizontal stripes.

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

Possible variants of the price movement:

Red and green arrows.

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

How is coronavirus spreading around the planet? The US, Italy, Spain, China and Iran are at high risk

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The Chinese pneumonia virus COVID-2019 has "captured" more than 100 countries around the world. More than 105,000 people are infected, mostly in China. The largest number of infected and deaths is in the "hotbed" of infection - China. Apart from China, Italy has been the most affected at the moment, with more than 6,000 cases of infection. More than 200 people were killed. The entire country is under quarantine. Schools and cinemas have been closed, all sporting events have been canceled, and any events where a large number of people may gather are prohibited. Some regions with the highest number of cases are quarantined. Citizens are not allowed to leave their homes without good reason. According to the current plan, such measures have been taken until April 3. No one knows what will happen after April 3. Everything will depend on whether it is possible to stop the spread of infection in the country. The Italian authorities decided to involve an additional 20,000 doctors and nurses in the fight against the virus. The main thing now is to stop the infection. It is noted that about 600 people are in intensive care, but about 600 have fully recovered. The average age of those who died from the virus is 81 years. It follows that first of all deaths are recorded in the elderly. People with weak, due to age-related reasons, immunity and health. 80% of people who died from the virus had other diseases. Thus, on the example of Italy, we can conclude that the virus is not fatal, but can lead to a fatal outcome if the patient has poor health. Thus, the elderly and people with weak immune systems are primarily at risk.

About 3000 cases of infection have been recorded in the UK, five have died. All of them were elderly people with poor health. All who contacted the dead are isolated, including medical staff. The United States also recorded several hundred cases of the disease (about 700). Most are in the New York State, where a state of emergency has already been declared. Several people died. New York Governor Andrew Cuomo believes mass quarantine is the best way to slow the spread of infection. Washington state has also been one of the most infected. The state recorded about 70 cases of the disease. As in many other countries, those who die from the virus are elderly people. In addition, a large number of patients were recorded in Iran - about 6,000. 145 people died. At the same time, firstly, representatives of the medical sphere believe that the real numbers can be much higher, and secondly, two representatives of the Parliament have already died from the coronavirus.

Meanwhile, panic is brewing in countries with the highest incidence of the disease. Thank God that so far this word only refers to the desire of people to stock up on all necessary products and not to leave the house without unnecessary need. Therefore, a shortage of certain foods may occur. For example, in the UK, Secretary of Health Matt Hancock urged people not to buy more than they needed, assuring that there was enough food for everyone. The minister also assured that he works with supermarkets in the direction of delivering food and necessary goods to the home in case people have to isolate themselves. However, representatives of UK supermarkets argue that the demand for the most necessary food products is "going wild" and cast doubt on the fact that the authorities will be able to keep the situation under control and provide all citizens with food and basic necessities. One of the directors of large supermarket chains even stated that there were no contacts with the government.

Quite unexpectedly, Spain took the lead in the number of cases, where according to the latest data, the number of infected exceeded 1200. According to the Minister of Health of Spain, Salvador Illa, the situation with coronavirus in the country has significantly worsened in recent days. Most infections have been reported in Madrid. Most of the cases are elderly people in nursing homes and employees of these homes. Two weeks quarantine has also been announced in Madrid with the closure of all schools, universities and kindergartens.

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

Gold above $1700: the next step is $2000?

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The yellow metal feels confident amid sagging oil and a slowdown in global financial markets, justifying the status of a safe haven asset. The cost of precious metals surged at the beginning of the week, although experts are confident that it is unlikely for it to stay in high positions for a long time.

The yellow metal was trading above $1,700 per ounce on Monday, March 9, surpassing 7-year highs. Experts explain the rapid rise in precious metals by the total spread of the coronavirus COVID-19 and the deafening collapse of oil prices.

Recall that black gold prices dipped 30% after Saudi Arabia announced plans to dramatically increase oil production, and OPEC+ countries could not agree to reduce the volume of raw materials.

According to experts, the key factors supporting the gold market are negative interest rates, increased market risks, aggravation of crisis phenomena in the world economy and the raging epidemic of coronavirus COVID-19. Many experts are certain that the yellow metal is the only reliable refuge of investors, which is not afraid of any cataclysms.

The sharp rise in the price of precious metals forced many analysts to reconsider their previous forecasts. Many of them expect further gold growth up to $1900– $2000 per ounce. However, the currency strategists of a number of large banks believe that the precious metal will not hold at $1,700 or more, but will slightly fall back from these levels. This forecast was confirmed on Tuesday, March 10. Gold is currently trading near $1,659– $1,660 per ounce.

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Most analysts expect a slight decrease in the cost of precious metals in the near future. However, in the long run, gold will be able to regain its lost positions and strengthen them, experts said. The yellow metal is one of the most liquid assets and the most preferred for investors, especially during periods of political and economic crises. A number of currency strategists are awaiting its sale to compensate for losses on oil, stocks and other financial instruments.

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 (WEEKLY) for March 2020

What are the options for the development of the movement #USDX, EUR / USD, GBP / USD and USD / JPY (Weekly) during the spring-summer period of 2020?

Intermediate Operational Scale (Weekly)

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US dollar index

The development of the #USDX dollar index movement in the spring-summer period of 2020 will continue in the 1/2 Median Line (94.80 - 97.60 - 100.30) of the Intermediate operational scale forks, taking into account initial SSL processing (99.20) and the control UTL (99.70)of the Minor operational scale forks. The markup for developing the mentioned levels is presented on the animated chart.

The upward movement of the dollar index can be continued after the breakdown of the upper boundary of the 1/2 Median Line channel (100.30) of the Intermediate operational scale forks and will be directed to the levels:

- 101.90 - the initial SSL Intermediate line;

- 103.82 - maximum of 01/01/2017.

On the other hand, in case of breakdown of the lower boundary (support level of 94.80) of the 1/2 Median Line channel of the Intermediate operational scale forks, the option to continue the development of the downward movement #USDX to the boundaries of the 1/2 Median Line channel (94.40 - 92.70 - 90.85) of the Minor operational scale forks.

Marking options for the movement #USDXin the spring-summer period of 2020 is shown on the animated chart.

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Euro vs US dollar

The movement of the single European currency EUR / USD in the spring-summer period of 2020 will be due to the development and direction of the breakdown of the boundaries of 1/2 Median Line channel (1.1430 - 1.1300 - 1.1150) of the Minor operational scale forks. The traffic marking in 1/2 Median Line channel of the Minor operational scale forks is shown in the animated chart.

Now, in case of breakdown of the lower boundary (support level of 1.1150) of the 1/2 Median Line Minor channel, then the downward movement of EUR / USD can be continued to the initial SSL (1.0800) and control LTL (1.0710) lines of the Minor operational scale forks.

Alternatively, in case of breakdown of the upper boundary (resistance level of 1.1430) of the 1/2 Median Line channel Minor, the upward movement of the single European currency can be continued to the equilibrium zone (1.1530 - 1.1770 - 1.2000) of the Minor operational scale forks.

The details of the EUR / USD movement options in the spring-summer period of 2020 are shown in the animated chart.

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Great Britain pound vs US dollar

Her Majesty's Currency continues to remain on 1/2 Median Line (1.2870 - 1.3150 - 1.3440) of the Minor operational scale forks, respectively, in the spring-summer period of 2020, the development of the GBP / USDmovement will be determined by working out the above levels - the movement details inside the 1/2 Median Line Minor channel are presented on the animated chart.

The breakdown of the lower boundary (support level of 1.2870) of the 1/2 Median Line channel Minor - will make it possible to continue the downward movement of Her Majesty's Currency to the initial SSL line (1.2520) of the Intermediate operational scale forks and the initial SSL Minor line (1.2350).

On the contrary, the breakdown of the upper boundary (resistance level of 1.3440) of the 1/2 Median Line channel of the Minor operational pitchfork will determine the further development of the GBP / USD movement to the equilibrium zone (1.3550 - 1.3980 - 1.4376) of the Minor operational scale forks.

The details of the GBP / USD movement in the spring-summer period of 2020 can be seen on the animated chart.

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US dollar vs Japanese yen

The development of the USD / JPY currency movement of the "country of the rising sun" in the spring-summer period of 2020 will be determined by the development and direction of the breakdown of the boundaries of 1/2 Median Line channel (104.40 - 105.80 - 106.90) of the Minor operational scale forks. The detail movements within the 1/2 Median Line Minor channel are presented on the animated chart.

The breakdown of the upper boundary (resistance level of 106.90) of the 1/2 Median Line channel of the Minor operational scale forks will lead to the continuation of the upward movement of USD / JPY to the targets:

- SSL start line (107.40) of the Intermediate operational scale forks;

- the upper boundary of the 1/2 Median Line channel Intermediate (108.00);

- control line UTL Minor (111.10);

- maximum 112.23 of February 16, 2020;

- maximum 114.56 of September 30, 2018.

Meanwhile, the breakdown of the lower boundary (support level of 104.40) of the 1/2 channel Median Line Minor will lead to the option of continuing the downward movement of the currency of the "country of the rising sun" to 1/2 Median Line (102.20) of the Intermediate operational scale forks and the boundaries of the equilibrium zone (100.80 - 99.04 - 97.40) of the Minor operational scale forks.

We look at the details of the USD / JPY movement in the spring-summer period of 2020 on the animated chart.

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The review was compiled without taking into account the news background. Thus, the opening 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 start date of the countdown - March 1973, when the main currencies began to be freely quoted relative to each other.

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

GBP/USD. Results of March 10. Pound sterling "repays debts" to US dollar

4-hour timeframe

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Amplitude of the last 5 days (high-low): 111p - 103p - 107p - 103p - 165p.

Average volatility over the past 5 days: 116p (high).

The British pound sterling followed the European currency and began to adjust. Moreover, the British currency grew much weaker against the dollar than the euro, and now - it has adjusted much stronger than the euro. What is it? Market participants recalled that everything is not as good as we would like in the UK? Remember Brexit and the low probability of a trade agreement with the EU? Or were British pound traders simply less likely to panic than the rest? One way or another, but the pound has already adjusted to the Kijun-sen line and so far does not show any signs that it might linger near this line. One gets the impression that the pound has undergone only a general market trend called "getting rid of the dollar", but quickly came to its senses and is now returning to the usual trading mode. If so, then the downward trend may well be resumed now, as the British currency did not have growth factors either.

Strange as it may seem, we have not received any important news, messages, and comments from "top officials" from the UK. No new reports on negotiations with the European Union, no new data on the fight against coronavirus, no new comments on possible actions of the Bank of England. Therefore, traders can only guess at the coffee grounds. The main subjects of these divinations are now the possible actions of the BoE and the Federal Reserve. The fact is that, unlike the ECB, the BoE's rates are at a more or less stable level – 0.75%. And the factor of weak monetary policy in Britain compared with the US was one of the main factors along with Brexit, the fall of the British currency in the last three years. However, if the Fed continues to mindlessly reduce the key rate, it will soon catch up with the British regulator. And then one of the main factors for the strengthening of the US dollar against the pound will be offset. Brexit will continue, negotiations on a trade deal that will continue to have a negative impact on the pound, but it is the Fed that can put an end to the hegemony of the US dollar against European currencies. And how can we not remember that Donald Trump strongly opposed the expensive dollar from the very beginning of his term as president? How can we not remember that he blamed all the troubles of the Fed and Jerome Powell personally for high interest rates? How can we not remember the emergency meeting between Powell and Trump in the White House, after which the criticism of the first noticeably subsided? In any case, the Fed has not yet taken a new step to ease monetary policy, and there are still very high chances that the BoE will go for a policy easing in March. This way, the gap can remain.

Macroeconomic statistics are currently not available from overseas or Great Britain. Wednesday will only be the only day this week that is full of important macroeconomic data, and the rest of the days will be completely empty. However, even tomorrow, we have no confidence that market participants will respond to the reports. In the last 7-10 days, the markets were completely under the impression of the collapse of stock markets, the fall in the cost of oil, and did not pay attention to the ordinary reports. Whether the period of total ignoring of statistics has ended, we will find out just tomorrow. In the meantime, we can only say that the coronavirus that caused panic in all world markets has not gone away and continues to spread throughout Europe. In Italy, a quarantine has already been declared, and all sports events have been canceled. Many other countries have also taken measures to prevent the possible spread of the virus. Of course, tourism and industrial production are the first to suffer. The latter sector is highly dependent on international activities, import/export operations. However, supply disruptions related to quarantine in some countries, such as China, and the transfer of employees to remote work in many international companies, cannot but affect business activity and production volumes. Oil has already fallen down due to the fact that the demand for it has decreased banally. And demand is reduced when production and consumption of products derived from oil, such as gasoline, are reduced.

From a technical point of view, the current movement of the pound/dollar pair is hardly even a correction. This is the British pound's collapse, since this currency has lost almost 200 points during the day. Thus, we can only once again note that now is clearly not the best time to trade, since the pair can travel long distances during the day that cannot be predicted in advance.

Recommendations for short positions:

The pound/dollar began a strong downward movement on the 4-hour timeframe. It is advised that you sell the British currency not earlier than when the pair has consolidated below the Kijun-sen critical line with the goals of Senkou Span B line and the support level of 1.2838. It is this moment that will allow us to conclude that the trend is changing to a downward one.

Recommendations for long positions:

Traders are advised to buy the pair again only if quotes return to the area above the critical line with the goal of a first resistance level of 1.3150. When opening any positions, it is recommended to act as carefully as possible and remember about the increased risks.

Explanation of the illustration:

Ichimoku indicator:

Tenkan-sen is the red line.

Kijun-sen is the blue line.

Senkou Span A - light brown dotted line.

Senkou Span B - light purple dashed line.

Chikou Span - green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD indicator:

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

Support / Resistance Classic Levels:

Red and gray dashed lines with price symbols.

Pivot Level:

Yellow solid line.

Volatility Support / Resistance Levels:

Gray dotted lines without price designations.

Possible price movements:

Red and green arrows.

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

EUR/USD. Results of March 10. EU GDP accelerated by 1%. Panic continues to be present in the markets

4-hour timeframe

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Amplitude of the last 5 days (high-low): 119p - 92p - 125p - 143p - 156p.

Average volatility over the past 5 days: 127p (high).

The long-awaited correction began on the EUR/USD pair, but so far it is very weak and unstable. At the moment, the price has not even been able to work out the critical Kijun-sen line, which, by the way, is not so far from it. Thus, a strong upward trend persists, and at any moment, traders can again begin to move the pair up. The panic mood of the market is fully preserved, which is perfectly visible by the volatility indicators, which have been breaking all records in the last ten days. Thus, the market is still very dangerous for opening any positions, since within a few hours the pair can go 100-150 points in any direction. Most importantly, it is very difficult to predict the movement of the euro/dollar pair, as it does not react to macroeconomic statistics. An emergency speech by US President Donald Trump was held tonight, in which he announced negotiations with Congress and the Senate to lower America's payroll tax as part of the fight against coronavirus. Many traders and experts considered this a bear factor. However, we believe that a downward correction has begun. That is, the quotes reduction factors on Tuesday, March 10, are exclusively technical. Firstly, Trump has not yet reduced taxes, so market participants had nothing to respond to. Secondly, during the last 7-8 trading days there were news and messages much more important than this, and all of them were ignored.

Meanwhile, the fourth quarter GDP indicator was published in the European Union. The increase was 1% in annual terms. This is very small, but more than experts predicted (+ 0.9%). The increase was + 0.1% in quarterly terms. As you might guess, this publication was also left without market attention.

At the same time, most traders are looking forward to further actions by the ECB and the Fed. We have already said that the emergency rate cut looks, to say the least, strange. Yes, the coronavirus continues to spread and slow down the world economy. However, the problem of the epidemic must be solved first of all by medical methods. It is clear that the US central bank decided to play it safe and stimulate the economy in advance, when there were no signs of its slowdown. All recent macroeconomic reports were at a fairly high level. The Fed does not want to allow a repeat of 2008, so it plays "ahead of the curve". At the same time, the more the Fed lowers the rate now, the less room for maneuver it will have in the future. Coronavirus is a dangerous phenomenon for the entire planet and its economy, but it is not the only potential threat. In recent years, there have been many events in the world that have successfully slowed down the economy, but there have been few events that would have stimulated it. It is only worth recalling that GDP and industrial production in the United States have been declining in the past year and a half, even without the coronavirus. The situation is no better in the eurozone, which "distinguished itself" by exactly the same reductions in GDP and industrial production. In addition, global growth rates have been affected by trade wars, mainly between China and the United States. What if new cataclysms occur in the next few years? What measures will the Fed take then? We believe that the actions to reduce the rate in the US is clearly traced to Trump's figure. As analysts, it is difficult for us to judge what is happening in the highest government circles. It is obvious that we do not have all the necessary information to make such conclusions. However, if you simply compare Trump's fierce desire to bring rates to zero and the coronavirus factor, which allows you to legally lower them to the required levels, then some questions arise. For example, isn't the coronavirus a simple excuse? Why not direct all your efforts and financial flows to fight this virus? However, instead of regularly reporting on medical advances in the fight against the virus and new investments in the health sector, Trump declares that the virus will not survive the warm season, then that Americans have nothing to worry about. Now, when the number of cases is growing in the United States, Trump has come under a barrage of criticism for spreading false information. However, he is no stranger to being criticized.

Soon, one can expect statements in the style: "the coronavirus is not fair in relation to the United States." Former US coordinator for countering the Ebola virus, Ron Klein, believes the president is misleading American citizens and says obviously false things. According to Klein, the US president is fixated on the "prosperity of America" and carefully denies any problems in the country. That is, Trump's policy is to constantly say how everything is good in America, and that this, of course, is his merit. Such rhetoric is absolutely logical in the run-up to the 2020 elections. It is possible that Trump will also win the coronavirus. Also, according to Klein, there may be many more infected in the United States . Only such a small number of infected people are reported because most states do not conduct any infection tests at all . Accordingly, there is simply no data from many states . Many experts also agree with Klein. "A vaccine in two to three months is absurd," they say.

Recommendations for short positions:

For selling the euro, we recommend waiting for quotes to consolidate below the critical line. And this is the condition for shorts with the lowest volumes while aiming for a support level of 1.1090.

Recommendations for long positions:

Euro currency purchases with the target resistance level of 1.1549 can be opened in case of a price rebound from the Kijun-sen line. In any case, it is recommended that you to be as careful as possible with the opening of any positions.

Explanation of the illustration:

Ichimoku indicator:

Tenkan-sen is the red line.

Kijun-sen is the blue line.

Senkou Span A - light brown dotted line.

Senkou Span B - light purple dashed line.

Chikou Span - green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD indicator:

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

Support / Resistance Classic Levels:

Red and gray dashed lines with price symbols.

Pivot Level:

Yellow solid line.

Volatility Support / Resistance Levels:

Gray dotted lines without price designations.

Possible price movements:

Red and green arrows.

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

EUR/USD. Trump's haste, US inflation, and COVID-19

The euro-dollar pair sharply dropped this morning, losing almost 150 points in a few hours. But the price slowed its fall in the middle of the 13th figure: the initial euphoria from Donald Trump's speech faded, while the news background regarding the dynamics of the spread of the coronavirus continues to instill fear in investors.

Let me remind you that the dollar strengthened throughout the market thanks to the speech of the US President, who promised to support the country's economy. According to him, the White House is now preparing a package of measures to combat the negative impact of the consequences of the coronavirus epidemic on the US economy. The announced measures will affect, in particular, income tax and loans for small businesses. Trump told reporters that a possible payroll tax cut or "very substantial" tax relief will be discussed at an upcoming meeting with congressional Republicans.

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Dollar bulls were enthusiastic about this news, which became a kind of "spoon of honey in a barrel of tar". After a series of negative infopods for the US currency, the White House's intentions were able to provide significant support to the greenback. At the same time, the bears of the EUR/USD pair were not able to develop success – after reaching the local low of 1.1330, the pair stopped its fall and started marking time, even showing attempts to grow. Looking ahead, it should be noted that the pair can still go down to the area of the 12th figure and even test the nearest support level of 1.1190 (the Tenkan-sen line on the daily chart) - especially if the White House's intentions are confirmed, and the ECB announces a monetary policy easing the day after tomorrow.

But sales look very risky at the moment. First, there was information on the market that Trump hastened to announce such large-scale changes. According to the US press (in particular, CNBC), the White House is not yet ready to offer Congress an incentive program that would limit the negative impact of the coronavirus. So, according to unnamed sources, the statement of the American leader caught economic advisers and administration officials by surprise, since there is no formed program yet, and the corresponding ideas are under discussion.

Secondly, at the moment, any more or less loud statement by Trump must be viewed through the prism of the upcoming presidential election. The "convenient opponent" in the form of Democrat Sanders continues to lose points – according to the latest polls, Biden is ahead of him by 16%. With a high probability, we can assume that he will become the winner of the primaries. Therefore, the current head of the White House, who is already famous for his populism, could not help but use the situation with the coronavirus in his favor. But the de facto "exit" result may be more modest than market expectations. Especially since Trump only announced consultations with Congress, and not specific economic measures. By the way, House speaker Nancy Pelosi and Senate minority leader Chuck Schumer have already told reporters that any payroll tax cut should only be taken against those affected by the virus. While the head of the White House announced a general tax relief.

In other words, the market began to doubt that the Trump administration will take large-scale and, accordingly, effective steps to counter the negative impact of the coronavirus. In any case, today all attention will be focused on the announced press conference of the US President. If the market is disappointed with the proposed measures, the dollar will collapse again "on all fronts".

Meanwhile, the Federal Reserve is preparing to further reduce the interest rate – at least, almost all experts and currency strategists are sure of this. The market is only arguing about how aggressive the actions of the US regulator will be. According to some analysts, the Fed will limit the rate cut to 25 points in March, while others allow a reduction of 50 or even 75 points. By the way, today Trump once again criticized the Fed, calling the central bank a "pathetic, slow moving Federal Reserve, headed by Jay Powell". He called on the central bank to immediately reduce the base interest rate "to the level of competing countries."

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Thus, Trump's bellicose rhetoric may provide temporary support for the US currency – the Fed's dovish intentions will in any case put background pressure on the greenback. If the previously announced measures are called into question (for example, Trump will accuse the congressmen of "intransigence"), the EUR/USD pair will quickly return to its previous positions.

The decline in US inflation may also put additional pressure on the dollar. The preliminary data for February will be released tomorrow. According to forecasts, the overall consumer price index will show a negative trend: on a monthly basis, it will slow to zero, and to 2.2% on an annual basis. Core inflation should come out at the level of January - both in monthly and annual terms. If the indicators come out at the expected level, the dollar is unlikely to react to the release. However, any deviation from the forecast values can raise the volatility of the pair.

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

EURUSD and GBPUSD: pound drops amid rumors of new budget rules. Euro tries to stay near weekly lows before an important ECB

Talk about what the European Central Bank will do at its meeting this Thursday continues to bring the market back to its senses, especially the European currency, which managed to update the 15th figure at the beginning of the week, but now it has adjusted to the support area of 1.1350.

Almost everyone is confident that the ECB will expand its asset purchase program, but as for the key interest rate, it may remain unchanged. Only the deposit rate will be reduced by 10 bps. The expansion of the asset repurchase program can be doubled, from 20 billion euros per month to 40 billion euros. The terms of the TLTRO targeted long-term refinancing program can also be significantly eased.

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As I noted above, the euro remains under pressure amid concerns about such programs, as well as due to the likely reduction in interest rates. However, the spread of the coronavirus will continue to maintain demand for risky assets and put pressure on the dollar and US bond yields.

On the other hand, traders ignore the good fundamental statistics for the eurozone countries, since, most likely, next month's reports will clearly be negative, since the coronavirus epidemic has seriously affected the European continent. Take at least one Italy, where the quarantine was extended until April 5 this year. All borders and educational institutions have been closed, and all sporting events have also been canceled.

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I noted above that data on industrial production in France in January of this year were ignored by traders, even though production was restored after the end of a series of strikes that were related to the pension reform. According to a report by the statistics Agency Insee, industrial production increased by 1.2% in January compared to December, while economists had forecast an increase of 1.7%. Let me remind you that in December 2019, production fell by 2.5% at once. Growth was observed in all sectors. Thus, production in the manufacturing industry increased by 1.2%, and in construction by 1.8% at once. The energy sector received the least support – 0.9%.

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In Italy, industrial production also turned out to be much larger than economists had predicted. However, as I noted above, all reports were prepared before the coronavirus outbreak and should not be taken seriously. According to a report by the statistics Agency Istat, industrial production in Italy increased by 3.7% in January this year compared to December. Economists had expected growth of only 2%. Let me remind you that in December, production fell by 2.6% at once.

As for the technical picture of the EURUSD pair, the support border has shifted to the 1.1338 area. A break in this range will increase the pressure on risky assets, which will lead to an update of the lows in the area of 1.1280 and 1.1240. The return of euro buyers to the market will be indicated by the breakout of the 1.1395 resistance, which will open a direct road to the week's highs in the area of 1.1460 and 1.1490.

GBPUSD

The British pound remains under pressure after a report on the weakening of retail sales, which is directly related to the February bad weather. According to the data, retail sales increased by only 0.1% in February compared to the same period last year, while there was an annual growth of 3.2% in February 2019.

Experts expected a jump in food sales amid the spread of the coronavirus, but there was no significant spike. Also, the improvement in consumer sentiment did not lead to an increase in sales.

Rishi Sunak, the British Finance Minister, is expected to announce a package of measures today that will address the consequences of the coronavirus epidemic, but this is unlikely to support the British pound, as it will lead to changes in budget rules that will keep the budget deficit for a longer period than previously expected.

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