Technical analysis recommendations for EUR/USD and GBP/USD on March 12

Technical analysis recommendations for EUR/USD and GBP/USD on March 12

Economic calendar (Universal time)

Against the backdrop of global disruptions, tragedy and the big game of those who are or are just going to become a world government, the economic calendar, with separate statistical data, sometimes looks very faded, with little definition. Nevertheless, stresses and collapses in quotes cannot occur daily, but economic indicators are constant and have a schedule.

12:30 producer price index (USA)

12:45 interest rate decision and monetary policy statement (ECB)

13:30 press conference of the ECB

EUR / USD

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The pair performed a deep corrective decline to the daily short-term trend (1.1262). Strengthening this support is also provided by Fibo Kijun (daily and weekly), which are now located slightly lower at the level of 1.1222. It is possible to form a rebound, but the depth of correction and the strength of the resistance, which still remain a wide front within 1.1370 - 1.1479, are unlikely to allow players to increase in the near future to restore positions. If the met levels are broken, and the decline continues, the next support zone is now concentrated in the 1.1137 area (monthly Tenkan + weekly Kijun + lower border of the weekly cloud + daily Kijun).

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At lower time intervals, the players to decline went down to key levels. At the moment, a retest of the central Pivot level (1.1293) and the weekly long-term trend (1.1319) is being performed. If the bears keep these levels for themselves and update yesterday's low (1.1251), then we will continue to decline. At the same time, supporting the classic Pivot levels 1.1219 - 1.1177 - 1.1103 will act as downward targets within the day. Fixing above the weekly long-term trend (1.1319) will preserve uncertainty and prolong the confrontation, since it is difficult to expect players to quickly win and restore positions in the current situation, although now everything is possible. The levels of 1.1409 (R2), 1.1451 (R3) and 1.1496 (maximum extremum) are among the landmarks that can be noted today.

GBP / USD

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The pair closed the last day under the support of 1.2851-82 (weekly Kijun + monthly Fibo Kijun). As a result, the main interest of the bears today is focused on the accumulation of supports 1.2736 - 1.2670 (weekly levels + monthly Tenkan). Moreover, consolidation below will allow to consider new bearish perspectives. The closest resistances are now the levels passed on the eve of 1.2851-82 and 1.2967-1.3001.

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At the lower time intervals, having the advantage and support of all the analyzed technical instruments, the players to decline develop a downward trend after the breakdown of the weekly long-term trend. Today, the bears have already designated a new low. Support and guidance within the day are the classic Pivot levels 1.2758 (S1) - 1.2695 (S2) - 1.2586 (S3). The first guideline for the development of the upward correction is the resistance of the central Pivot level (1.2867). In turn, the most important resistance that can influence the distribution of forces is currently at 1.2976 (weekly long-term trend).

Ichimoku Kinko Hyo (9.26.52), Pivot Points (classic), Moving Average (120)

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EUR/USD. The "iron curtain", the index of fear, and the expected outcome of the ECB meeting

EUR/USD is trading, in anticipation of the ECB's March meeting, where the results of which may significantly affect the dynamics of the euro. Meanwhile, the coronavirus epidemic continues to put pressure on the dollar, as the currency's index resumed its decline after another correction. The dollar reacts to the news regarding the impact of COVID-19 both in the US and around the world.

Today, Donald Trump imposed a 30-day ban on people from European countries entering the US. Explaining his decision, the head of the White House accused Europeans that the EU countries are not responding enough to the threat of the coronavirus pandemic. At the same time, the European Union itself said that the US authorities did not coordinate this ban with Brussels.

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Because of the coronavirus, the CME Group closed the Chicago Mercantile Exchange's trading platforms, and the NBA officially suspended the 2019/20 season, because one of the basketball players, Utah center Rudy Gober, contracted the virus. The COVID-19 also entered the US Congress, as Senator Maria Cantwell, Democrat from the Washington State, was diagnosed with the virus. World-famous actor Tom Hanks, who is now in isolation in Australia, also got infected.

All in all, the number of coronavirus cases in the US increased to 1,322. The disease has already claimed 38 lives. As a result, 24 States of the country declared a state of emergency: Arizona, New Mexico, Louisiana, Arkansas, Washington, Michigan, Vermont, North Carolina, Massachusetts, Colorado, Ohio, Illinois, Rhode island, New Jersey, Oregon, New York, Pennsylvania, Utah, Kentucky, Indiana, Hawaii, Maryland, California, Florida. An emergency situation was also reported in the district of Columbia.

The chief infectious diseases specialist of the United States also added fuel to the fire as he predicted yesterday the deterioration of the situation with the coronavirus. He said that the COVID-19 vaccine may not be available in the coming months, and, in the worst case, may not even appear until a year and a half later. Meanwhile, the rate of the spread of the virus suggests that the infection will spread exponentially.

With this, it is not surprising that the CBOE volatility index (the so-called "fear index") jumped by 10% yesterday, while the main Wall Street stock indexes fell back into the "red zone". The stock market reacted to the "inaction" of the US authorities, as Trump promised Americans that the government will adopt a large-scale package of measures to stimulate the economy, but the White House remains silent on this topic. No one has announced any coherent and coordinated measures, including tax breaks.

Yesterday, Donald Trump called on the Congress to ease the tax burden as part of the fight against the impact of the coronavirus, but the Senators are not eager to take the action. This stalemate did not only negatively affected the stock market, but also threatened the positions of the dollar.

At the same time, the euro is also under some pressure, as yesterday, the Bank of England also lowered its interest rate by 50 bps. Prior to that, the Fed, RBA and Bank of Canada also took the same actions, so traders have every reason to believe that the ECB will also resort to such measures. According to experts, three main scenarios are possible: the central bank will either reduce the deposit rate to -0.6% (the most expected option), or increase the volume of QE up to 40 billion euros. The ECB may also take a wait-and-see position, while announcing one of the mentioned options. Some experts also believe that the ECB may also change its terms of operations for providing long-term liquidity to banks.

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Unlike the Federal Reserve, who has more room for maneuver against the framework of traditional monetary policy, the European regulator has already used all its capabilities long before the outbreak of the virus, so easing the monetary policy right now might not be a good idea.

Most likely, Lagarde will still decide to reduce the rate, but there will be no consensus in the market regarding the possible actions of the ECB. The rate cut will not turn the EUR/USD pair downwards, even if the central bank's available levers of influence has almost dried up, and the US regulator can continue to reduce the interest rate up to zero. You should not trust the initial reaction of the market regarding the ECB's decision, as the dollar is still vulnerable, even compared to the euro.

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Economic bubbles continue to collapse in the markets (EUR/USD and GBP/USD pairs are expected to continue to decline)

The global markets are still under the strongest pressure from the impact of the coronavirus on the global economy. This topic remains in the focus of investors around the world.

The announcement by the World Health Organization (WHO) of the coronavirus pandemic on Wednesday led to a new collapse in global markets. Investors do not see anything in front of themselves, except for this topic - neither the publication of economic data, nor news from China that this misfortune is gradually starting to go back there. It can be recalled that the last time the WHO pandemic was announced was 11 years ago due to the spread of swine flu. But then, there was no such hysteria, which is observed in the "Western" media.

We have repeatedly pointed out earlier that the "West" itself agitated these fears and was frightened of it. There are several versions of a conspiracy theological nature, which indicate several reasons for inflating the situation around the Chinese coronavirus. The first is the ongoing sluggish trade war between the United States and China. The American media spread this topic in order to inflict an economic blow on China and force it to make concessions. The second is the desire to cover up the obvious failures of the United States and Western countries from the crisis of 2008-09 and to reset this problem. And the third, in our opinion, the most real one is the irresponsibility of Western democracies and the media, which intensify this problem and then could not deal with it, which resulted in the spread of this misfortune to Europe, and then to the Western hemisphere of our planet.

As we thought, the currency "war" continues in the currency market. Following the United States, Australia and Canada, interest rates on Wednesday were unexpectedly cut by 0.5% by the Bank of England, on the one hand, and as expected by us on the other. This fully confirms our argument that the depreciation of the dollar will stop in relation to major currencies due to lower rates of the Central Bank of the currency, which are among the main ones. We expect the same actions from the RBNZ and today from the ECB.

It can be recalled that today will be a meeting of the European regulator. It is assumed that it will keep interest rates at zero. However, it seems to us that there is a high probability that it can go on to further lower the key interest rate to the level of -0.5%. Otherwise, the single currency may continue to increase against the dollar, pound, which will hit European exports to these countries.

In general, assessing the current situation in the market, we believe that the negative trend will continue. Stock markets will continue to decline, with the most noticeable collapse in emerging markets. But the stock markets of advanced economies will remain under attack. It can be noted that such a landslide drop is positive for stock markets that have grown excessively earlier on various kinds of incentive measures. Thus, economic "bubbles" will continue to burst, but the markets will create excellent conditions for buying risky assets after some time, when the hype around the coronavirus will disappear, and the world Central Banks will actively turn on printing presses and everything will start again.

Forecast of the day:

EUR/USD is trading above the level of 1.1255. An unexpected decision by the ECB to lower interest rates will lead to the resumption of falling prices to the level of 1.1215.

GBP/USD is trading below the level of 1.2800. We believe that it will continue to decline to 1.2720, with the prospect of falling to the level of 1.2645.

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Gold is vulnerable for a pull back below $1,600

Gold price got rejected once again despite the new higher high above $1,700. The bearish divergence in the RSI combined with the rejection at the upper channel boundary makes me expect price should fall below $1,600 again.

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Red lines - bullish channel

Green line - bearish divergence

Gold price got rejected at the upper channel boundary for the second time. Price has touched this line three times so far and I believe it is an important resistance. Combined with the fact that the RSI is making lower highs, I expect Gold price to move towards the lower channel boundary. As we explained in our latest Ichimoku cloud analysis on Gold, short-term support is at $1,630-25 and a break below it will open the way for a move towards $1,570-$1,550. Then we will re-evaluate the situation. Resistance is at $1,671 and as long as price is below that level I remain neutral or bearish Gold.

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Technical analysis of ETH/USD for 12/03/2020:

Crypto Industry News:

On March 11, co-founder of the decentralized TorusLabs platform, Zhen Yu Yong (Zen), wrote on Twitter that he was diagnosed with the COVID-2019 coronavirus.

Zen called for persons who may have had contact with him during the ETHLondon hackathon, which took place from February 28 - March 1, or the Ethereum Social Conference (ECC), which took place from March 3 - March 5 in Paris, to take " additional precautions and/or examination. "

The coronavirus threat in recent weeks has affected several major cryptocurrency conferences. Paris Blockchain Week 2020 has recently been moved to December 9, after France has banned large indoor meetings since the end of February. However, the ECC was exempted from the ban because it had fewer than 5,000 participants.

The coronavirus also influenced the London Blockchain week, which had very low attendance, and the presentations that were initially to take place on stage were quickly reorganized as live webinars.

Public concerns about the spread of the disease also had a significant impact on the attendance of yesterday's CryptoCompare summit on digital content in London.

Technical Market Overview:

The ETH/USD pair just broke below the technical support located at the level of $178.35 - $176.95 and is heading lower. The low was so far made at the level of $168.92 and there is no sign of the downtrend reversal despite the oversold market conditions, but the bulls are trying to bounce higher towards the level of $209.00 (major technical resistance zone). The next target for bears is seen at the level of $156.23 and $154.24.

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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Indicator analysis. Daily review of GBP/USD on March 12, 2020

Trend analysis (Fig. 1).

Today, after retesting down a retracement level of 85.4% equivalent to 1.2795 (blue dashed line), a downward movement is possible with the target at the lower fractal of 1.2726 (blue dashed line).

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Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - down;

- Fibonacci levels - down;

- Volumes - down;

- Candlestick analysis - down;

- Trend analysis - down;

- Bollinger Lines - down;

- Weekly schedule - down.

General conclusion:

Today, the price may continue to move down.

An unlikely scenario: from a pullback level of 85.4% equivalent to 1.2785 (blue dashed line) work up with a target of 1.2880, a pullback level of 23.6% (red dashed line).

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Technical analysis of BTC/USD for 12/03/2020:

Crypto Industry News:

In the next round of censorship, YouTube removed two videos from two separate cryptographic channels. Ivan on Tech, a cryptographic programmer, wrote on Twitter that YouTube had removed one of his videos. Moon, a technical analyst and press reporter, said the platform removed one of his compositions.

Many cryptographic YouTubers received bans and warnings at the end of 2019, including Chris Dunn, Crypto Beadles and Altcoin Daily. Chris Dunn noticed that YouTube banned his channel for "harmful or unsafe content" and "sale of regulated goods."

In response to Moon at the end of December, YouTube wrote on Twitter that the bans were a mistake. After indignation, YouTube restored several flagged videos and accounts.

Currently, it looks like YouTube has returned to blocking cryptocurrencies. Ivan on Tech said he received a warning for deleted video and Moon said that YouTube threatened him with a warning after removing his video.

"Cryptographic purge is still happening and I'm dealing with it for the second time," Moon said in a tweet.

Technical Market Overview:

The BTC/USD pair has made another lower low at the level of $7,315 as the global coronavirus pandemic continues. There is no sign of the downtrend reversal despite the oversold market conditions and some mild bullish divergence on the H4 timeframe chart. The next target for bears is seen at the level of $6,938. The immediate resistance is seen at the level of $7,897.

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 $6,353 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 12/03/2020:

Technical Market Overview:

Another lower low was made overnight at the level of 1.2786 as the coronavirus pandemic continues. The market is trading in a new descending channel in oversold conditions, so some kind of bounce is possible. The overall corrective cycle had been very aggressive so far and the recent breakout from the main channel (marked in brown) does not look good for bulls. The next target for bears is seen at the level of 1.2823 and 1.2786. The immediate technical resistance is seen at the level of 1.2848.

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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Indicator analysis. Daily review of EUR/USD on March 12, 2020

Trend analysis (Fig. 1).

Before the news today, the price may attempt to reach the historical resistance level of 1.1292 (blue dotted line), although it is unlikely to succeed. During the news, it may begin to move up with the first target at the resistance line of 1.1346 (white bold line). From this line, it is possible to continue its upward movement with the target of 1.1458, a retracement level of 38.2% (red dashed line). And after the news, the continuation of the upward movemnet is with the first goal at the lower fractal 1.1252.

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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, the price may start to move up.

An unlikely scenario: from the historical resistance level of 1.1292 (blue dashed line), work down with the target of 1.1223, a retracement level of 38.2% (blue dashed line).

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Technical analysis of EUR/USD for 12/03/2020:

Technical Market Overview:

The EUR/USD pair has tested the 61% Fibonacci retracement located at the level of 1.1248, but the bounce from that level was very shallow and bears seem to be in control of the market. The coronavirus fears are still spreading across the financial markets despite the temporary stillness. In that case, the nearest technical support is located at the level of 1.1232 - 1.1250 and 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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Hot forecast for EUR/USD on 03/12/2020 and trading recommendation

Donald Trump revived the currency market, which was in a comatose state, andeven data on inflation in the United States could not bring it out of this state. But under the guise of the state of affairs with the coronavirus in Europe, the President of the United States, imposed a thirty-day ban on entering America from the Old World. The measure is extremely tough, and not the fact that is justified. Moreover, restrictive measures by the United States were much lenient during the peak of the spread of coronavirus in China. However, this decision is furnished in the best traditions of television shows. Donald Trump announced this during an appeal to the nation, as if it was a declaration of war. At the same time, the forty-fifth president of the United States argued this decision in such a way that it cannot be called anything other than a kick in Europe. He assured everyone that health professionals had assured him that Europe was not capable of providing security in epidemiology. Thus, the rigidity of the measures themselves, and how all this was arranged, eventually led to the weakening of the single European currency.

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At the same time, as noted above, the market essentially ignored inflation data in the United States, which showed a decrease from 2.5% to 2.3%. Although, a decrease in inflation almost unambiguously indicates that the Federal Reserve System will continue to lower the refinancing rate. And in theory, inflation data should have led to the strengthening of the single European currency.

Inflation (United States):

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In many respects, ignoring inflation data in the United States is due to both the information panic spread by the media and the expectation of today's meeting of the European Central Bank. The fact is that, the uncertainty only increases despite the fact that no one seems to be expecting anything else from Christine Lagarde, except for the next reduction in the deposit rate especially if you pay attention to yesterday's speech by the head of the European Central Bank, which was entirely devoted to the risks posed by the coronavirus. The intrigue lies in the fact that the heads of the Federal Reserve System and the Bank of England spoke with exactly the same agenda right before emergency meetings. And as a result of which, interest rates were reduced. Therefore, we should not exempt the European Central Bank from presenting a big and unexpected surprise today. So if the Federal Reserve or the Bank of England will reduce their refinancing rates and these decisions were not so unexpected, then the situation with the European Central Bank is somewhat different. In fact, this possibility was discussed only once immediately after the Federal Reserve's refinancing rate cut until yesterday's speech by Christine Lagarde. They didn't discuss it for long, just a day or two. After that, this idea was forgotten, because it seemed fantastic. Now, let's say there are options.

Refinancing Rate (Europe):

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From the point of view of technical analysis, we see the preservation of increased activity in the market, where the quote locally went down to the area of 1.1250, but then returned to the level of 1.1300. In fact, we see a partial recovery process, relatively large-scale inertial course, but the quote still has a kind of overbought, which is not paid attention to, due to the strong external background.

In terms of a general review of the trading chart, we see signs of a change in the medium-term downward trend, due to the same inertia; however, due to the characteristic speculative attitude and the pressure of the external background, the signals about a change in the trend may be false.

We are probably waiting for a characteristic ambiguity in anticipation of the ECB meeting, where speculative interest will be generated. At first, the amplitude in the region of 1.1260 / 1.1333 is not excluded, where bursts of activity will appear relative to the rate depending on the decision of the regulator.

The trading recommendation will depend on your desire for risks, since it would be most logical to sit out of the background outside the market, but if you consider yourself to be a speculator, it is possible to play on jumps, where the reference coordinates are at 1.1260 / 1.1333 for now.

From the point of view of a comprehensive indicator analysis, we see that the minute and hour periods are in the process of recovery, signaling a sale while the daily plots are looped at an earlier inertia, signaling about purchases.

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GBP/USD: plan for the European session on March 12. Bears resume pound downward trend after Bank of England decides to lower

To open long positions on GBP/USD, you need:

After yesterday's interest rate cut by the Bank of England, the bulls quickly reacted and played down the entire drop. However, the inability to break above the resistance of 1.2961 quickly scared off new buyers, which led to a gradual decline in GBP/USD and a breakthrough of the rather important support of 1.2868, which I paid attention to in my forecast yesterday. At the moment, buyers only have to protect the support of 1.2798, and only the formation of a false breakout on it will be a signal to open long positions in the expectation of a return and consolidation above the resistance of 1.2840. In the scenario of a further fall in GBP/USD, which is more likely, I recommend looking at long positions from the February lows around 1.2744 and 1.2707. An equally important task for the first half of the day for the bulls will be to consolidate above the resistance of 1.2840, which will lead to an upward correction to the high of 1.2868 and 1.2906, where I recommend taking profits.

To open short positions on GBP/USD, you need:

Sellers will try to form a false breakout in the resistance area of 1.2840 in the first half of the day, which will be the first signal to open short positions. This will lead to a return of GBP/USD and a consolidation below the support of 1.2798, which will increase the pressure on the pair and allow testing the lows of February this year 1.2744. However, the longer-term goal of the bears will be to support 1.2707, where I recommend taking profits. When the pound rises above the resistance of 1.2840, it is best to return to short positions at the test of the high of 1.2906, or to rebound from the resistance of 1.2961. The only thing that can upset the sellers of the pound is the divergence that is formed on the MACD indicator. If there is no pressure on the pair below the 1.2798 support and its rapid decline, I recommend giving up short positions to break this level.

Signals of indicators:

Moving averages

Trading is conducted below 30 and 50 moving average, which indicates a continuation of the bearish trend.

Bollinger bands

In case of decline, support will be provided by the lower boundary of the indicator in the region of 1.2755. In case of an upward correction, growth will be limited near the upper boundary at 1.2945, where you can sell the pound immediately for a rebound.

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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 12. Traders await ECB's important decision on interest rates. Bulls aim to

To open long positions on EURUSD, you need:

Yesterday's data on inflation in the US generally benefited the us dollar, but all the attention today will be on the decision of the European Central Bank on monetary policy. A reduction in deposit rates is expected, as well as an expansion of the bond-buying program, which may put pressure on the euro. With the current picture, buyers need to return to the resistance level of 1.1327, which can lead to an update of the level of 1.1379, and also allow them to reach the high of 1.1422, where I recommend taking profits. If pressure on the euro persists in the first half of the day, and the bulls will not be able to keep the pair above the support of 1.1279, then it is best to return to long positions at the test of the low of 1.1188, or buy immediately on a rebound from the support of 1.137.

To open short positions on EURUSD, you need:

It is likely that the market will go against the crowd, and after the ECB's decision, the bulls will try to return the pair to the highs of this month. If you break through the resistance of 1.1327, I recommend that you do not rush to open short positions, and it is best to wait for the ECB's decision and update the highs of 1.1379 and 1.1422, as well as the area of 1.1459, the higher the better. I recommend selling EUR/USD only from these levels, with small stop orders above. In the scenario of the bears returning to their support of 1.1279, the pressure on the pair will increase, which will lead to a test of the lows of 1.1231 and 1.1188, where I recommend profit taking before the decision of the European regulator is announced.

Indicator signals:

Moving averages

Trading is conducted below the 30 and 50 moving averages, which keeps the probability of a further downward correction in the pair.

Bollinger Bands

Before the ECB's decision is announced, the lower boundary of the indicator around 1.2131 will provide support, while growth will be limited to the upper level at 1.1355.

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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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AUD/USD declines due to coronavirus pandemic

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The coronavirus pandemic has already spread around the world. Despite all the efforts to eradicate the virus, it has not eased. It is affecting the world's economy. Every country is suffering losses due to this pandemic. The AUD/USD pair is trading in the bearish channel and the nearest liquidity pool bellow the current price is 0.6435 and the 0.6314. The AUD/USD pair may reach both of these levels. There is a probability that the Aussie will retrace to 0.6512 level and then it may decline again.

The overall bias for AUD/USD is bearish

(Disclaimer)

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Overview of the EUR/USD pair. March 12. Christine Lagarde: the economic shock from the "coronavirus" may be comparable to

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) - sideways.

CCI: -33.0384

According to the "linear regression channels" system, the EUR/USD currency pair continues to adjust against the upward trend. Yesterday, March 11, the moving average line was worked out, and now the future movement will depend on whether there will be a consolidation below the moving average or a rebound. Unfortunately, it is still impossible to say that the panic on the world markets has definitely passed and the auction has returned to its usual course. For example, yesterday, macroeconomic statistics from overseas were ignored in the form of an inflation report. At the end of the trading day, the US currency slightly rose in price and the reasons for its strengthening lie with a 95% probability in the "technique". After such strong growth, sooner or later a downward correction should have started. And it began not yesterday when an interesting and important report was published. And a day earlier, the quotes went a much longer way down than yesterday, when there were fundamental reasons for the decline in quotes.

On Thursday, March 12, the situation may remain the same in the currency market. Important events in the European Union are planned for this day. Everything will start with the publication of the report on industrial production for January, which, with a high probability, will fail again. According to experts' forecasts, the reduction in volumes may amount to 3.1%. A month earlier, the value was -4.1% y/y. Thus, in principle, it does not even matter what value is recorded, in any case, it will be negative. In annual terms, the indicator should also be understood as an important feature. The current value is compared with the value of the same month last year. However, a year earlier, there was a drop of 4.1%. Thus, we are witnessing an absolute decline, not a relative one. In monthly terms, the indicator should add about 1.4%. However, after a series of failed months, a one-and-a-half percent increase is almost nothing.

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An even more important event is the regular scheduled meeting of the European Central Bank. Recall that the Bank of England and the Fed lowered its key rates by 50 basis points. They did it at emergency meetings. As you can see, the ECB has waited for the previously scheduled date and there is only one question open: what decisions will be made by Christine Lagarde and the monetary committee of the regulator? It is worth noting that both the British Central Bank and the Fed had room for maneuver. That is, both central banks had a lot to lower rates. In the case of the ECB, rates are already negative. That is, it is unlikely that the European regulator will lower the rate by 50 basis points, which is now -0.50%. However, you can't keep the rate down. You need to resist the "coronavirus" and you can only choose from monetary instruments to reduce the rate or expand the asset purchase program. We believe that both tools will be applied. Most likely, the QE program will be expanded from the current 20 billion euros per month. And the deposit rate will be lowered. It should also be noted that immediately after the meeting and the announcement of its results, a press conference will be held by Christine Lagarde. However, the head of the ECB did not wait for the meeting itself and today, during a conference call with the leaders of the alliance countries, made a statement that literally shocked the markets. Although the word "shocked" would be acceptable if the markets were not in a panic all last week. Now every high-profile news or statement is no longer something discouraging. Lagarde said that Europe will face a serious economic shock, which will be comparable to the 2008 crisis if EU countries do not take measures to curb the spread of the "coronavirus". However, Lagarde believes that economic shock will not be avoided in any case. It can only be minimized and limited in time. According to Lagarde, European governments should encourage banks to lend to companies that have been affected by the coronavirus. Thus, if Lagarde's rhetoric continues to be "dovish" tomorrow, and the regulator goes for monetary policy easing, the US dollar will gain new strength to strengthen in tandem with the euro currency.

From a technical point of view, the pair continues to adjust. Tomorrow, much will depend on the fundamental and macroeconomic background. And the most important thing depends on whether market participants are ready to work out the incoming information. If not, the pair will continue to move according to the technical rules until (and if) the panic returns to the currency market.

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The average volatility of the euro/dollar currency pair remains at record values for the euro currency and rose to 144 points per day. This value once again confirms the fact that the markets remain in a very excited state and can move unexpectedly and sharply in any direction. It is enough to just compare the values of volatility in early to mid-February. Thus, on Thursday, we again expect a decrease in volatility and movement within the channel, limited by the levels of 1.1123 and 1.1411.

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 downward correction. Thus, now it is still recommended to trade "on the trend", that is, to buy the European currency with the targets of 1.1353 and 1.1411, in case of a rebound in the price from the moving average. You can sell the pair after fixing the price below the moving average line with the first target of 1.1123.

Explanation of the illustrations:

The highest linear regression channel is the blue unidirectional lines.

The lowest linear regression channel is the purple unidirectional lines.

CCI - blue line in the indicator window.

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

Murray levels - multi-colored horizontal stripes.

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

Possible variants of the price movement:

Red and green arrows.

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

Forecast for EUR/USD on March 12, 2020

EUR/USD

The euro has been staying near Tuesday's close for the past two days, amid the pending decision of the ECB's monetary policy. Markets are confident that the rate will be lowered by 0.1%, but there are various assumptions about additional measures. Such easing measures may include more lenient conditions for providing long-term liquidity (TLTRO), an increase in the own limit for repurchasing government bonds, and other quantitative easing (QE) measures.

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The goal of pulling down the euro is the MACD line on the daily scale (1.1090). Overcoming the support opens the second target along the price channel in the area of 1.0975.

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Yesterday's decline was stopped by the MACD line on the four-hour chart. Accordingly, the euro's departure under this support (1.1260) will launch a new wave of downward movement.

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

Forecast for GBP/USD on March 12, 2020

GBP/USD

The Bank of England lowered its key rate from 0.75% to 0.25% on Wednesday. The pound's initial reaction was to fall by 100 points, but then there was an increase of 150 points, and the day was closed with a loss of 65 points. Volatility in the markets has returned, but the overall trend for strengthening the dollar remains, because the situation in the British economy is significantly deteriorating; according to the latest data, GDP for January showed 0.0%, the trade balance deteriorated from -1.4 billion pounds to -3.7 billion, industrial production decreased by 0.1%, production in the construction sector showed -0.8% in January.

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On the daily scale chart, the surge in growth was stopped by the balance line (red indicator line), meaning that volatility remained within the downward trend. The signal line of the Marlin oscillator is fixed in the decreasing trend zone. Now the target of the pound is the 110.0% Fibonacci level at 1.2647. Overcoming the level opens the second target for the reaction level of 123.6% at the price of 1.2538.

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On the H4 chart, the price is fixed under the balance line and the MACD line, the Marlin is declining and does not show signs of a reversal. We are waiting for the British pound to fall to the designated goals.

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Forecast for AUD/USD on March 12, 2020

AUD/USD

The Australian dollar fell by only 5 points on Wednesday, the market took a rest for a bit, and is now preparing to continue the decline, as the first target level of 0.6440 remained a few points and technical indicators show the intention of the price to decrease.

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The 0.6440 support is represented by the point of convergence of the embedded price channel line and the 100.0% Fibonacci level on the daily scale chart. Leaving the price below it opens the target of 0.6295-the Fibonacci level of 123.6%.

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On a four-hour chart, the price drops below the indicator lines, and the Marlin oscillator develops in its own descending channel, turning down from its upper boundary.

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Forecast for USD/JPY on March 12, 2020

USD/JPY

Optimism in the stock market continued for one day – on Tuesday. On Wednesday, the US S&P 500 fell 4.89%, setting a new low since the crisis began on February 20. During these days, the quote has decreased to the levels of the first decade of February last year. Today, in the Asian session, the Chinese index China A50 loses 1.50%, the Japanese Nikkei225 falls by 5.17%. The USD/JPY pair can only decline under such powerful pressure from the adjacent market.

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On the daily scale chart, the price approached the embedded line of the price channel in the area of 102.95. Overcoming the support opens the target on the lower line of the price channel at the level of 100.88.

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On a four-hour chart, the price is held by the balance line and decreases below it. The Marlin oscillator has entered the downward trend zone. We are waiting for the pair to decline further.

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Fractal analysis of the main currency pairs for March 12

Forecast for March 12:

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, the price is in correction from the upward trend and forms the potential for corrective movement of March 9. Consolidated 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 latter value will lead to an in-depth correction. Here, the target 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 correction stage.

Trading recommendations:

Buy: 1.1421 Take profit: 1.1503

Buy: 1.1505 Take profit: 1.1660

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: 1.3026, 1.2936, 1.2874, 1.2786, 1.2739, 1.2611 and 1.2527. Here, the price forms the initial conditions for the downward cycle of March 9. The continuation of the movement to the bottom is expected after the price passes the noise range 1.2786 - 1.2739. In this case, the target is 1.2611. For the potential value for the top, we consider the level of 1.2527. Upon reaching which, we expect consolidation, as well as a rollback to the top.

Short-term upward movement is possibly in the range of 1.2874 - 1.2936. The breakdown of the latter value will lead to an in-depth correction. Here, the target is 1.3026. This level is a key support for the downward structure.

The main trend is the initial conditions for the downward movement of March 9

Trading recommendations:

Buy: 1.2874 Take profit: 1.2934

Buy: 1.2938 Take profit: 1.3024

Sell: 1.2738 Take profit: 1.2613

Sell: 1.2609 Take profit: 1.2528

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For the dollar / franc pair, the key levels on the H1 scale are: 0.9570, 0.9518, 0.9444, 0.9414, 0.9304, 0.9257, 0.9219 and 0.9178. Here, we are following the formation of the initial conditions for the top of March 9. The continuation of the movement to the top is expected after the price passes the noise range 0.9414 - 0.9444. In this case, the target is 0.9518. For the potential value for the top, we consider the level of 0.9570. Upon reaching which, we expect consolidation, as well as a pullback to the bottom.

Short-term downward movement is possibly in the range of 0.9304 - 0.9257. The breakdown of the last value will lead to an in-depth correction. Here, the target is 0.9219. This level is a key support for the upward structure, its passage in price will lead to the formation of initial conditions for the downward trend. Here, the goal is 0.9178.

The main trend is the initial conditions for the top of March 9

Trading recommendations:

Buy : 0.9444 Take profit: 0.9516

Buy : 0.9519 Take profit: 0.9570

Sell: 0.9304 Take profit: 0.9259

Sell: 0.9255 Take profit: 0.9220

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For the dollar / yen pair, the key levels on the scale are : 108.96, 108.00, 106.60, 105.40, 103.15, 102.43 and 101.46. Here, we are following the formation of the initial conditions for the upward cycle of March 9. The continuation of the movement to the top is expected after the breakdown of the level of 105.40. In this case, the target is 106.60. Price consolidation is near this level. The breakdown of the level of 106.60 should be accompanied by a pronounced upward movement. Here, the target is 108.00. For the potential value for the top, we consider the level of 108.96. Upon reaching which, we expect consolidation, as well as a rollback to the correction.

Short-term downward movement is possibly in the range of 103.15 - 102.43. The breakdown of the latter value will have the downward structure. In this case, the first potential target is 101.46.

The main trend: the formation of initial conditions for the upward cycle of March 9

Trading recommendations:

Buy: 105.40 Take profit: 106.54

Buy : 106.62 Take profit: 108.00

Sell: 103.15 Take profit: 102.45

Sell: 102.40 Take profit: 101.48

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For the Canadian dollar / US dollar pair, the key levels on the H1 scale are: 1.4011, 1.3970, 1.3905, 1.3848, 1.3752, 1.3699, 1.3634 and 1.3519. Here, we are following the development of the local ascendant structure of March 9. Short-term movement to the top is expected in the range of 1.3848 - 1.3905. The breakdown of the last value will lead to a pronounced movement. Here, the target is 1.3970. For the potential value for the top, we consider the level of 1.4011. Upon reaching which, we expect consolidation, as well as a pullback to the bottom.

Short-term downward movement is possibly in the range of 1.3752 - 1.3699. The breakdown of the last value will lead to an in-depth correction. Here, the target is 1.3634. This level is a key support for the top.

The main trend is the local upward structure of March 9.

Trading recommendations:

Buy: 1.3848 Take profit: 1.3905

Buy : 1.3907 Take profit: 1.3970

Sell: 1.3752 Take profit: 1.3700

Sell: 1.3696 Take profit: 1.3636

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For the Australian dollar / US dollar pair, the key levels on the H1 scale are : 0.6952, 0.6806, 0.6758, 0.6695, 0.6579, 0.6448, 0.6392 and 0.6304. Here, we are following the formation of a medium-term upward structure from March 9. At the moment, the price is in the correction zone of this structure. The continuation of the movement to the top is expected after the breakdown of the level of 0.6580, In this case, the target is 0.6695. The breakdown of this level will allow us to expect movement to the level of 0.6758. The passage at the price of the range 0.6578 - 0.6808 should be accompanied by a pronounced upward movement. Here, the potential target is 0.6952.

Short-term downward movement is possibly in the range of 0.6448 - 0.6392. The breakdown of the latter value will lead to the formation of local initial conditions for the downward trend. Here, the potential target is 0.6304.

The main trend is the formation of the ascending structure of March 9, the correction stage

Trading recommendations:

Buy: 0.6580 Take profit: 0.6695

Buy: 0.6697 Take profit: 0.6758

Sell : 0.6448 Take profit : 0.6394

Sell: 0.6390 Take profit: 0.6306

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For the euro / yen pair, the key levels on the H1 scale are: 121.65, 120.04, 119.49, 118.66, 118.05, 116.64, 116.27 and 115.27. Here, we are following the formation of the initial conditions for the upward cycle of March 9. Short-term upward movement is expected in the range of 118.05 - 118.66. The breakdown of the latter value will lead to a movement to the level of 119.49. Short-term upward movement, as well as consolidation is in the range of 119.49 - 120.0. The breakdown of the level of 120.04 should be accompanied by a pronounced upward movement. Here, the potential target is 121.65.

The range of 116.64 - 116.27 is a key support for the top. Its passage at the price will lead to the development of a downward trend. Here, the potential target is 115.27.

The main trend is the formation of the rising structure of March 9

Trading recommendations:

Buy: 118.05 Take profit: 118.64

Buy: 118.68 Take profit: 119.49

Sell: 116.25 Take profit: 115.30

Sell: Take profit:

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For the pound / yen pair, the key levels on the H1 scale are : 134.80, 133.88, 133.26, 132.13, 131.61, 130.78 and 129.61. Here, we are following the development of a small downward cycle of March 10. The continuation of the movement to the bottom is expected after the price passes the noise range 132.13 - 131.61. In this case, the target is 130.78. Price consolidation is near this level. For the potential value for the bottom, we consider the level of 129.61. Upon reaching which, we expect a pullback to the top.

Short-term upward movement is possibly in the range of 133.26 - 133.88. The breakdown of the latter value will lead to the development of an in-depth correction. Here, the goal is 134.80. This level is a key support for the downward cycle.

The main trend is the local descending structure of March 10

Trading recommendations:

Buy: 133.26 Take profit: 133.86

Buy: 133.90 Take profit: 134.80

Sell: 131.60 Take profit: 130.78

Sell: 130.74 Take profit: 129.61

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

Coronavirus pandemic and its impact on the EURUSD rate, as well as other assets

The COVID-19 coronavirus and trade wars are provoking the most powerful global crisis since 2008, when the collapse of Lehman Brothers Bank sent the global economy into deep shock. Central banks and governments are trying to counter the impending disaster, but so far to no avail. Last week, the Federal Reserve at an emergency meeting lowered the rate by 0.5%, but this did not calm the markets, frightened by the epidemic and its consequences, but only added fuel to the fire of falling quotes. Rates were lowered by the Reserve Bank of Australia and the Bank of Canada. The Bank of England also cut the rate by half a percent at an emergency meeting today, on Wednesday, March 11.

On Tuesday, at a meeting with Republican lawmakers on Capitol hill, the US President Donald Trump proposed setting the payroll tax rate at 0% by the end of this year. As Treasury Secretary Steven Mnuchin later said, the president has support among both parties. As you can see, Trump not only writes messages on Twitter, but also takes measures to somehow stabilize the situation. Although his reaction last week, when he did not actually comment on the events taking place in the markets, indicated that he was completely at a loss. In addition to measures to reduce taxes, Trump proposes the introduction of state subsidies for shale oil producers, seriously affected by the collapse of the price. So the competition between low oil prices and the printing press may well be won by the printing press, which, apparently, can only be broken by sticking an iron scrap in its mechanism. However, the markets continue to be nervous while the decision on the tax incentive has not been made.

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The volatility of the US market is at its highest levels in at least five previous years, exceeding the average values at the level of 15 by more than 5.5 times (Fig.1). And in contrast to previous years, in 2015 and 2018, the volatility of the stock market increases more and more every week, which drives investors into a stupor, forcing them to sell off assets, and this, in turn, causes prices to fall further.

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Rice.1: volatility of the US stock market.

The decline in the US stock market led to a sharp rise in the euro. The fact is that starting in 2015, when the Fed stopped its quantitative easing programs, the European currency began to replace the US dollar as the funding currency. This stimulated massive currency arbitrage operations, which are known to us by the term carry-trade. The essence of such operations is that investors receive financing in euros at a zero interest rate, then buy dollars and place money at a rate in US dollars.

However, when assets start to fall in value, especially as it is now, investors rush to exchange dollars for euros, which causes its rate to rise. We observed this phenomenon at the end of February and last week. However, we must understand that there are still more dollars on the market than the euro, and the European currency has only recently become a funding currency and cannot replace the dollar. Therefore, the appreciation of the euro is rather temporary and will end with the decision of the ECB, which has not yet responded to the shocks.

The problem is that Christine Lagarde has almost no tools to respond, and the epicenter of the COVID-19 infection from China is gradually moving to Europe. Most likely, the central bank will announce additional incentives in the form of long-term financing programs and create some funds to help countries affected by the epidemic. For now, the situation in Europe is only getting worse. At the moment, more than 10 thousand people have been infected in Italy, more than one and a half thousand in Germany and France, and more than two thousand infected in Spain. However, when you read these lines, the situation is likely to get even worse. In addition, the idea that, for example, the United States, a wage tax can be abolished in Europe, will hardly occur to European bureaucrats.

Today, Merkel said that up to 60% of Germans are likely to be infected with the virus. It is easy to calculate that with a death rate of about 5% and a population of 83 million people in Germany, as a result of the epidemic, up to 250 thousand people may die, most of whom will be elderly. This is a terrifying figure.

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If we assume an ideal situation in which there are no meetings of central banks, coronavirus and crazy volatility, then the dynamics of the EURUSD pair may look as follows. After receiving the sell pattern, the goal for pulling down the euro will be the 1.12 level. However, it is advisable that the position does not remain in the market during the announcement of the ECB decision and the press conference of Lagarde, when, in addition to the existing volatility, new uncertainties will appear.

Saudi Arabia's announced plans, which decided to sharply increase production to 13 million barrels per day, which could be another negative for the oil market, should be highlighted from Wednesday's news, but it cannot be ruled out that Saudi statements are no more than a bluff to force Russia to return to the negotiating table. In any case, the Russian economy looks more stable than the economy of Saudi Arabia, especially taking into account the fact that in Russia the budget is made up at an average annual price of oil of $42.5 and is surplus, and in the kingdom for $80 there is a huge hole. So Crown Prince Salman can raise rates as much as he wants, only hardly anyone will behave against his tantrum. In general, wait and see, let the coronavirus pass us, amen!

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

GBP/USD. Results of March 11. UK GDP and industrial production declines. Bank of England lowers key rate after Fed

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 was at a loss on Wednesday, March 11. In the morning, right after it became known that the Bank of England had lowered its key rate by 50 basis points, the pound/dollar pair fell. However, either large pending buy orders triggered when certain levels were reached, or traders remembered that the pound had fallen 200 points a day earlier, but sales of the British currency stopped very quickly. Thus, the reaction of market participants to the BoE rate cut was approximately the same as to a similar decrease in the Fed. That is very weak. At the moment, GBP/USD quotes fell to the Senkou Span B line, rebounded from it and even tried to resume the upward movement. There was a fresh fall during the US trading session caused by rather strong macroeconomic statistics from across the ocean. As a result, the pair continues to move down after a small upward correction. Once again, we would like to note that the panic has not completely left the markets. For example, yesterday the volatility of the instrument was about 200 points. Thus, the pair can still move in any direction, abruptly and unexpectedly.

So, the BoE lowered its key interest rate. The regulator lowered it when many central banks in the world were doing the same thing. However, it seems that Mark Carney and his successor, Andrew Bailey, were waiting for similar actions from the Fed, and only when this happened did they decide to ease British monetary policy. At a press conference after the emergency meeting, the current and future heads of the central bank said the following:

1) Lowering the key rate is intended to help and support British businesses, firms and households to cope with the effects of the coronavirus. According to Bailey and Carney, the economic shock will be sharp, strong, but short-lived.

2) The measures taken by the BoE are aimed at keeping firms and people in their jobs.

3) In addition to the measures taken by the BoE, Carney and Bailey expect the UK government to take similar measures to support the country's economy.

4) According to the latest stress tests, the UK banking system must withstand a prolonged economic downturn, and commercial banks will be able to continue lending to households and businesses.

It should also be noted that the British regulator has almost reached its lower limit of reducing the key rate. According to both Carney and Bailey, it makes no sense to lower the refinancing rate below the 0.1% mark, since such actions can have a negative impact on the UK banking sector. Thus, the BoE can lower the rate one more time, while the Fed can resort to such a step five more times. The question is whether Jerome Powell and company will take even more serious steps to ease monetary pressure on the US economy. Since a rate cut, especially such a strong one, is always a bearish factor for a currency whose issuer makes such a move, it is not surprising that the pound is now losing positions in a pair with the dollar. However, again, it is extremely difficult to say how long the downward movement will continue. We already said yesterday that the entire situation for the GBP/USD pair has transformed from a "swing" to a "roller coaster". Also, do not forget that if you delete the last two weeks, or simply do not pay attention to them, the British pound's position still causes great concern. We will not talk again about the uncertainty associated with Brexit, the future of the UK, the negotiations on trade deals with the EU and the US. The most banal thing that puts pressure on the pound and will continue to do so is macroeconomic statistics. Here is a simple example. The Fed feared a slowdown in the economy and lowered the rate. However, macroeconomic information from the US was strong and remained firm. Inflation is above 2%, the labor market has shown record growth rates in the last two months (based on reports from ADP and NonFarm Payrolls), and other indicators have at least not failed. What about the UK, whose central bank also feared for a slowdown in the economy and also cut the rate by 0.5%? Data continued to be weak, and remains so. Today, data on GDP was published in Great Britain. According to the first report, GDP in January in monthly terms was 0%. According to data from NIESR, the growth rate in January is also zero. Forecasts were higher. And that's not all. Data on industrial production for January was released today, which also failed. In annual terms, the decline was 2.9%, and 0.1% in monthly terms.

From a technical point of view, the pair is again approaching the Ichimoku cloud, which they could not overcome the first time. Given the fact that the indicators did not even have time to react to a small correction, there were no new sales signals.

A 24-hour timeframe

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But on the 24-hour timeframe, there is a strong signal in the form of an unsuccessful attempt to overcome the Senkou Span B. line. It was followed by a rebound with the resumption of the downward movement. At the moment, the quotes of the pair have returned to the area below the Kijun-sen line, so the prospects for further movement downwards are quite good.

Recommendations for short positions:

The pound/dollar pair resumed a strong downward movement on the 4-hour timeframe. It was very inconvenient to sell the British currency during the day today, as there were a large number of different fundamental and macroeconomic events. However, those traders who remain in sell positions can hold them with targets at 1.2838 and 1.2753.

Recommendations for long positions:

Buying the GBP/USD pair is recommended only when quotes return to the area above the critical line with the goal of the 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 11. European Union allocates 25 billion to fight the Coronavirus. US inflation accelerates, not

4-hour timeframe

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Amplitude of the last 5 days (high-low): 92p - 125p - 143p - 156p - 184p.

Average volatility over the past 5 days: 140p (high).

Have the markets calmed down? Today, on Wednesday, March 11, the EUR/USD pair passed "only" 80 points. Although two weeks ago this volatility value would have been considered high, in the current reality it is low. During the third trading day of the week there was no new growth or collapse of quotes of the euro/dollar pair. For most of the day, the pair traded along the critical Kijun-sen line. Thus, we believe that now there are signs that traders are starting to trade again consciously, and the state of panic is passing. Ironically, the reassurance of market participants came precisely on the day when the Bank of England urgently lowered the rate by 50 basis points, and important macroeconomic data were published in the United States and Great Britain. We will consider all British news in the next article on the GBP/USD pair, in the same we will focus on European and American news.

In fact, only one indicator was published in the United States today, but what! February consumer price index in several variations and dimensions. The main inflation rate in the United States was 2.3% y/y, which is higher than forecasted but lower than the previous month. Thus, it is definitely impossible to say whether the report turned out to be strong or weak. Moreover, the consumer price index excluding food and energy was stronger than forecast and amounted to +2.4% y/y (with market expectations +2.3%). Some experts consider this indicator to be more important and significant. Thus, both inflation rates in the US exceeded forecast values. True, these data do not yet take into account the easing of the Fed's monetary policy, as well as the panic week during which oil prices and US stock markets collapsed, and panic and chaos reigned in the foreign exchange market. There is reason to believe that the March values of all the most important indicators in the United States will give a big surprise to market participants. However, at the moment we are again stating a fact: the US macroeconomic statistics continues to remain at a very high level and shows practically no signs of slowdown. Thus, we are once again wondering if the Fed was in a hurry to lower the rate by 0.5%. And did the Fed look for a formal reason to meet Donald Trump? So far, everything looks that way.

The latest 50 basis point cut in the BoE's key rate looks like a game of catch-up. As the Fed eased monetary pressure on its economy so as not to lose on the international stage (as Trump has repeatedly said, urging Powell to lower rates as quickly and as strongly as possible), the British regulator took a similar step. Thus, the status quo between the countries has been restored. There is now only the ECB, which has not yet called emergency meetings, and has not given any comments on monetary policy. Everyone is interested in the question: what can the European regulator do in the current situation? According to many experts, when rates are already negative, each subsequent reduction will have a smaller stimulating effect on the economy. Thus, we are unlikely to get a situation with thoughtless monetary policy easing and frankly "helicopter money" in the European Union. However, it is likely that the ECB will also lower the rate, and at the same time expand the asset purchase program. Thus, all the central banks we are interested in will resort to serious stimulus measures in March. And only the Fed will have some room for maneuver in the future.

At the same time, all 27 heads of EU member states decided to invest 25 billion euros to fight the spread of the coronavirus. It is expected that 7.5 billion euros will be allocated from the Treasury of the EU, the remaining funds have yet to be raised. So far, the funds will be used to help the most affected EU countries: Italy, France and Germany. Although, according to our data, only Italy can be considered affected, and Germany and France are likely to be helped as the most developed EU countries to avoid slowing down their economies, which will lead to a slowdown in the growth of the entire bloc. There is no talk of closing the borders between the countries, but everything will depend on the further map of the spread of the COVID-2019 virus. In general, the situation is complicated.

From a technical point of view, the pair continues to adjust. As you have already understood, traders did not particularly react to today's data from overseas. Thus, the markets are calming down, but are still far from the usual trading mode. If the pair crosses the Kijun-sen line, the downward movement should continue.

A 24-hour timeframe

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On the 24-hour timeframe, the pair made an increase to the resistance level of 1.1470, rebounded from it and also started a downward correction. At the moment, it has fallen to the level of 1.1282 and, most likely, will not stay near it. After a strong upward movement, we expect a fall to the critical Kijun-sen line at least.

Recommendations for short positions:

For selling the euro, we recommend waiting for quotes to be consolidated below the Kijun-sen line. In this case, it is recommended to sell the currency pair in small lots with the goals of the volatility level of 1.1146 and the support level of 1.1090. The daily Kijun-sen line is also located near these levels, which also serves as a target for correction.

Recommendations for long positions:

Purchases of the euro currency with the goals of 1.1417 and 1.1549 can be opened if the correction is completed and the pair returns to the area above the critical line. In any case, we recommend that you be as careful as possible when opening 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