Indicator analysis. Daily review of GBP/USD on March 16, 2020

Trend analysis (Fig. 1).

Today, it is possible to test the retracement level of 38.2% - 1.2571 (red dashed line), when moving upwards. Upon reaching this level, there is a possible continuation of the upward movement with the target of 1.2691, a pullback level of 50.0% (red dashed line).

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Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - down;

- Fibonacci levels - up;

- Volumes - down;

- Candlestick analysis - up;

- Trend analysis - down;

- Bollinger lines - down;

- Weekly schedule - up.

General conclusion:

Today, the price may begin to move backward.

Unlikely scenario: from a pullback level of 23.6% - 1.2423 (red dashed line), work down with the target at the lower fractal 1.1950 (blue dashed line).

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

GOLD Shines Again, But For How Long?

Gold has decreased as much as $1,504 in Friday's trading session, but now is trading in the green after the Federal Reserve decision to add more stimulus measures to fight the coronavirus fallout. The FED has cut the federal funds rate by 100 bps and launching a massive $700 billion QE. The metal opened with a gap up, but it is still premature to talk about a significant upside movement after the breakdown below the $1,555 static support. The USD weakness could send Gold higher again. So, if the USDX decreases, we can expect the yellow metal to jump towards the $1,700 psychological level.

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Gold has rebounded, but it has registered only a false breakout above the $1,555 level, it has increased as much as $1,562 after opening the current session. The price has come back down to pressure the inside sliding line (SL) of the descending pitchfork and the S1 ($1,524) level, we'll see what will really happen because the selling pressure remains high as long as it is traded below $1,555 resistance (support turned into resistance).

Only a false breakdown below the inside sliding parallel line (SL) could signal only a temporary drop. If Gold registers another false breakdown, rejection, from the S1 (1524) level and from the sliding line (SL), we could think at a bullish momentum towards the upper median line (UML) of the descending pitchfork.

A further drop will be confirmed if the price closes today's gap and if it closes and stabilizes below the S1 (1524) level and below SL (descending dotted line), the next targets are seen at $1,484 level and lower at the median line (ML) of the descending pitchfork.

  • TRADING TIPS

The next major downside target is represented by the $1,484 level, a failure to reach this level could announce a potential upside movement. Gold could jump way higher on the short term if it comes back above the $1,555 level, you should know that a major increase will be confirmed only after a valid breakout above the upper median line (UML).

If the price fails to approach and reach the median line (ML), gold could come back at the upper median line (UML) as soon as possible. The last drop was natural after the impressive upside movement and after the USD rally.

Gold could drop anytime, that's why you should wait for a confirmation before going long again.

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

Fractal analysis of the main currency pairs for March 16

Forecast for March 16:

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: 1.1259, 1.1207, 1.1166, 1.114, 1.1065, 1.0988, 1.0942 and 1.0851. Here, we continue to monitor the development of the descending cycle of March 9. Short-term downward movement, as well as consolidation, is expected in the range 1.1114 - 1.1065. The breakdown of the latter value will lead to a pronounced downward movement. Here, the target is 1.0988. Price consolidation is in the range of 1.0988 - 1.0942. For the potential value for the bottom, we consider the level of 1.0851. Upon reaching this value, we expect a rollback to the top.

Short-term upward movement is expected in the range 1.1166 - 1.1207. The breakdown of the latter value will lead to an in-depth correction. Here, the target is 1.1259. This level is a key support for the downward structure.

The main trend is the downward trend on March 9

Trading recommendations:

Buy: 1.1166 Take profit: 1.1205

Buy: 1.1208 Take profit: 1.1257

Sell: 1.1065 Take profit: 1.0990

Sell: 1.0986 Take profit: 1.0943

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For the pound / dollar pair, the key levels on the H1 scale are: 1.2664, 1.2543, 1.2448, 1.2227, 1.2174 and 1.2051. Here, we are following the development of the March 9 downward cycle. The continuation of movement to the bottom is expected after the price passes the noise range 1.2227 - 1.2174. In this case, the potential target is 1.2051. Upon reaching this level, we expect a rollback to correction.

Short-term upward movement is possibly in the range of 1.2448 - 1.2543. The breakdown of the latter value will lead to an in-depth correction. Here, the target is 1.2664. This level is a key support for the downward structure.

The main trend is the downward trend on March 9

Trading recommendations:

Buy: 1.2448 Take profit: 1.2540

Buy: 1.2544 Take profit: 1.2664

Sell: 1.2174 Take profit: 1.2051

Sell: Take profit:

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For the dollar / franc pair, the key levels on the H1 scale are: 0.9686, 0.9641, 0.9570, 0.9518, 0.9444, 0.9411 and 0.9355. Here, we are following the development of the upward cycle of March 9. We expect short-term upward movement, as well as consolidation, in the range of 0.9518 - 0.9570. The breakdown of the latter value should be accompanied by a pronounced upward movement. Here, the target is 0.9641. For the potential value for the top, we consider the level of 0.9686. Upon reaching which, we expect consolidation, as well as a pullback to the bottom.

Short-term downward movement is possibly in the range of 0.9444 - 0.9411. The breakdown of the latter value will lead to an in-depth correction. Here, the target is 0.9355. This level is a key support for the top.

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

Trading recommendations:

Buy : 0.9520 Take profit: 0.9568

Buy : 0.9572 Take profit: 0.9640

Sell: 0.9444 Take profit: 0.9412

Sell: 0.9408 Take profit: 0.9360

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For the dollar / yen pair, the key levels on the scale are : 111.11, 110.31, 108.96, 108.00, 106.60, 105.97 and 105.02. Here, we are following the development of the upward cycle of March 9. The continuation of the movement to the top is expected after the breakdown of the level of 108.00. In this case, the target is 108.96. Price consolidation is near this level. The breakdown of the level of 108.96 will lead to the development of pronounced movement. Here, the goal is 110.31. For the potential value for the top, we consider the level of 111.11. Upon reaching this value, we expect consolidation, as well as a pullback to the bottom.

Short-term downward movement is possibly in the range of 106.60 - 105.97. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 105.02. This level is a key support for the top.

Main trend: upward cycle of March 9

Trading recommendations:

Buy: 108.00 Take profit: 108.92

Buy : 108.98 Take profit: 110.30

Sell: 106.60 Take profit: 106.00

Sell: 105.95 Take profit: 105.08

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For the Canadian dollar / US dollar pair, the key levels on the H1 scale are: 1.4092, 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 upward movement is expected in the range of 1.3848 - 1.3905. The breakdown of the latter value will lead to a pronounced movement. Here, the target is 1.3970. Price consolidation is in the range of 1.3970 - 1.4011. For the potential value for the top, we consider the level of 1.4092. 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 : 0.6390, 0.6326, 0.6229, 0.6098, 0.5997 and 0.5919. Here, we are following the development of the March 9 downward cycle. The continuation of the movement to the bottom is expected after the breakdown of the level of 0.6098. In this case, the target is 0.5997. For the potential value for the bottom, we consider the level of 0.5919. Upon reaching which, we expect consolidation, as well as a rollback to the correction.

Departure into correction is expected after the breakdown of the level of 0.6229. In this case, the target is 0.6326. We consider the level of 0.6390 to be the potential value for the top, this value is key support.

The main trend is the descending structure of March 9

Trading recommendations:

Buy: 0.6230 Take profit: 0.6325

Buy: 0.6327 Take profit: 0.6390

Sell : 0.6096 Take profit : 0.6000

Sell: 0.5995 Take profit: 0.5920

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For the euro / yen pair, the key levels on the H1 scale are: 123.12, 122.21, 120.93, 119.85, 118.42, 117.92, 117.11 and 116.27. Here, we are following the formation of the initial conditions for the upward cycle of March 12. The continuation of the movement to the top is expected after the breakdown of the level of 119.85. In this case, the target is 120.93. Price consolidation is near this level. The breakdown of the level of 120.95 will lead to the development of pronounced movement. In this case, the goal is 122.21. For the potential value for the top, we consider the level of 12312. Upon reaching this value, we expect a pullback to the bottom.

Short-term downward movement is possibly in the range of 118.42 - 117.92. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 117.11. This level is a key support for the upward structure. Its passage at the price will lead to the movement to the first potential target - 116.27. We expect this level designing the initial conditions for the downward cycle.

The main trend is the formation of local initial conditions for the upward cycle of March 12

Trading recommendations:

Buy: 119.85 Take profit: 120.90

Buy: 120.95 Take profit: 122.20

Sell: 177.88 Take profit: 117.20

Sell: 117.08 Take profit: 116.28

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For the pound / yen pair, the key levels on the H1 scale are : 135.42, 134.33, 133.14, 132.35, 130.92, 129.95, 128.71 and 127.87. Here, we are following the formation of a local descending structure of March 13. The continuation of the movement to the bottom is expected after the breakdown of the level of 130.92. In this case, the target is 129.95. Price consolidation is near this level. The breakdown of the level of 129.95 should be accompanied by a pronounced downward movement. Here, the target is 128.71. For the potential value for the bottom, we consider the level of 127.87. Upon reaching which, we expect consolidation, as well as a rollback to the top.

Short-term upward movement is possibly in the range of 132.35 - 133.14. The breakdown of the latter value will lead to the development of the upward structure. Here, the goal is 134.33. We consider the level of 135.42 to be a potential value for the top; upon reaching this value, we expect the expressed initial conditions for the ascending cycle to be formed.

The main trend is the formation of the local structure of March 13

Trading recommendations:

Buy: 132.35 Take profit: 133.10

Buy: 133.20 Take profit: 134.30

Sell: 130.92 Take profit: 130.00

Sell: 129.90 Take profit: 128.70

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

USD/CAD control zones for March 16, 2020

The movement last Friday was the first impulse recorded after the long weakening of the loonie. If today's WCZ 1/2 test 1.3890-1.3880 leads to an increase in supply and the formation of a sell pattern, then short trades will be popular. The first target of the decline will be 1.3631, the zone of the average course of the previous week. The probability of a rollback here is quite high.

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Working downwards will allow you to get more than 200 points of profit, so the stop loss should not exceed 65 points.

Meanwhile, an alternative growth model will develop, if the pair fixes above the WCZ 1/2. It will lead to the resumption of the upward movement, and the probability of updating the monthly maximum will increase again to 75%. Note that purchases from the current levels are not profitable, as the pair is trading near the weekly average move zone.

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

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

Monthly CZ - Monthly control zone. The area that is a reflection of the average volatility over the past year.

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Indicator analysis. Daily review of EUR/USD on March 16, 2020

Trend analysis (Fig. 1).

Today, the market will try, for the third time, to overcome the rollback level of 61.8% - 1.1053 (blue dotted line), but, according to the author, it is unlikely to succeed. An upward movement is possible from this line with the target of 1.1198, a retracement level of 23.6% (red dashed line).

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Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - up;

- Fibonacci levels - up;

- Volumes - up;

- Candlestick analysis - up;

- Trend analysis - down;

- Bollinger Lines - up;

- Weekly schedule - up.

General conclusion:

Today, from a retracement level of 61.8% - 1.1053 (blue dashed line) the price may most likely begin to move up with the first target of 1.1198, a retracement level of 23.6% (red dashed line). Upon reaching this line, the continuation of upward movement is possible with the target at the upper fractal of 1.1222 (blue dashed line).

An unlikely scenario: from a retracement level of 61.8% - 1.1053 (blue dashed line), work down with the target of 1.0948, a retracement level of 76.4% (blue dashed line).

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

Control zones for NZD/USD on 03/16/20

This morning, the minimum of last week was tested, which triggered the growth of the pair. The first target of the upward movement is the weekly control zone 0.6111-0.6100. Reaching this zone should be considered for the appearance of a sell pattern, since the probability of continuing the medium- term bearish momentum is still high.

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The downward momentum is already occurring outside the monthly average move. This makes it possible to consider a model of a return to its lower boundary, located at the level of 0.6196. Returning to this level will allow you to earn more than 100 profit points.

An alternative growth model will be developed if today's trading closes above the weekly control zone. This will open the direction for further growth to the level of 0.6196, which is the lower boundary of the monthly average move. Developing within the ascending movement will be corrective, therefore, it will require partial fixation at significant resistance levels.

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

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

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

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

Control zones for USD/CHF on 03/16/20

Today's plan will depend on how the pair responds to the Weekly Control Zone defining support zone 1/2 0.9456-0.9445. If the reaction is an increase in demand and the pattern of "absorption" is formed, then purchases will come ahead. The next target of growth will be the weekly control zone 0.9663-0.9641.

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Now, developing the upward direction remains a priority, as growth is a medium-term impulse.

An alternative decline model will be developed if today's trading closes below the Weekly Control Zone 1/2. This will allow the pair to return to the limits of the average course of the month and implement a priority correction model. The next target will be a weekly control zone 0.9346-0.9325. A test of this zone will lead to a return to the of the average move of the previous week in the future.

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

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

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

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

Chronicles of the Apocalypse. The Fed interest rate cut to almost zero overnight

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At a press conference on Friday, President Donald Trump announced an outbreak of the country's emergency coronavirus, allocating about $50 billion to fight the virus.

Trump also instructed the Department of Energy to purchase large volumes of crude oil for the US oil reserve, trying to help American shale producers, who were hit hard by the sharp drop in oil prices.

Large US energy companies have introduced homework rules for office staff and have begun health checks for remote or mission-critical workers as the coronavirus has spread throughout the United States and threatens the industry to stagger due to falling demand and profits.

The fall in demand and the price war, which led to a decrease in oil prices by about 50% this year, placed the industry in a tailspin. Many oil companies have drastically reduced costs and personnel to deal with the crisis.

Working at home will most likely reduce the number of trips by car and aircraft, which will lead to a reduction in oil demand in the US to 2.5 million barrels per day. Throughout the year, this could reduce motor fuel consumption by about 300,000–400,000 barrels per day.

On Saturday, the House of Representatives passed a bipartisan bill to combat coronavirus. The legislative package adopted by voting 363-40 provides free testing, increases sick leave benefits and provides food assistance to vulnerable groups of the population, including children.

It is expected that the Senate will vote positively on this bill and be forcefully implemented starting Monday.

Tonight, the Fed lowered its key interest rate to almost 0-0.25%.

"We expected the FOMC to lower the federal funds rate by 1% to 0.0-0.25% and keep it in this range for a while." - Barclays economists write, including Michael Gapen.

Last week the Federal Reserve intervened with additional liquidity operations to help support markets by offering short-term loans worth $1.5 trillion. The Fed also announced the expansion of its purchases of $60 billion per month, including treasury securities, long bonds, which will lead to a further increase in liquidity in the treasury markets.

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

GBP/USD Price movement For March 16, 2020

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The weekly clean low 1.2033 as a liquidity pool is acting as a magnet area for the Cable now. The global pandemic of the coronavirus will be push the GBP/USD pair to move down with the first target at the 1.2194 before the Cable sinks to 1.2033. As long as the pair does not retrace upwards higher than 1.2625-1.2650, the odds are that GBP/USD will go down to reach the 1.2033.

The overall bias of GBP/USD is bearish.

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

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

GBP/USD: plan for the European session on March 16. Pound continues to fly into the abyss of last year's low. Fed decision

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

The spread of the coronavirus and trade disputes with the EU only increase the pressure on the British pound, which, after the Bank of England lowered interest rates last week, continues to fly to the lows of 2019. At the moment, buyers can only expect to consolidate above the resistance of 1.2353, which will only lead to a small upward trend in the resistance area of 1.2417, where I recommend taking profits, although the longer-term goal of the bulls will be the resistance 1.2514. An equally important task will be to protect the lower boundary of the 1.2270 side channel. I recommend opening long positions from it only if a false breakout is formed, since trading against the trend is not the right decision. If this area breaks through, you can only count on rebounds from the lows of 1.2197, 1.2150 and 1.2112, and then by no more than 30-40 points.

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

Bears will try to maintain the trend in the pair, and the formation of a false breakout in the 1.2353 area will be the first signal to open new short positions in the expectation of a decline and a test of the low of 1.2270. A breakdown of this range will easily push GBP/USD to the new areas of 1.2197 and 1.2150, and the further goal of sellers will be support for 1.2112, where I recommend taking profits. If something goes wrong with the bears' plan today, only the 1.2417 resistance test will be a new signal to open short positions. Otherwise, you can sell immediately for a rebound from the highs of 1.2514 and 1.2605, where the moving averages also pass.

Indicator signals:

Moving averages

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

Bollinger Bands

In case of a decline, the lower boundary of the indicator around 1.2197 will provide support. In case of an upward correction, growth will be limited in the area of the average boundary at 1.2417, from where you can sell the pound immediately on the 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
The material has been provided by InstaForex Company - www.instaforex.com

Elliott wave analysis of EUR/GBP for March 16, 2020

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EUR/GBP has continued high through resistance at 0.8939 for a move closer to the next upside target-zone between 0.9101 - 0.9141. We expect a solid top to be set in this target-zone for renewed downside pressure towards our long-term target near 0.7500.

Short-term support is seen at 0.8939, which is expected to protect the downside for the final pop closer to the 0.9101 - 0.9141 target-zone. Only a direct break below the 0.8939 support will indicate that a top already is in place, while a break below support at 0.8843 will confirm wave B has peaked and wave C is unfolding.

R3: 0.9141

R2: 0.9101

R1: 0.9055

Pivot: 0.8975

S1: 0.8939

S2: 0.8890

S3: 0.8843

Trading recommendation:

Our stop at 0.8950 was hit for a loss of 50 pips. We will re-sell EUR at 0.9085 or upon a break below 0.8939.

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

EUR/USD: plan for the European session on March 16. Fed cuts interest rates to 0.25% and returns to QE program worth $700

To open long positions on EURUSD, you need:

The decision of the Federal Reserve to lower interest rates to 0.25% and return to the crisis program of asset repurchase QE worth $700 billion did not frighten buyers of the US dollar, and after a slight gap in the morning, the pair began to slowly descend again to the support of 1.1063, which the bears have already tested twice recently. The return to a crisis-based system of market support points to serious problems in the economy that may begin after the coronavirus pandemic. Today, the task of the bulls for the first half of the day is to protect the level of 1.1063, the formation of a false breakout at which will be the first signal to open long positions in order to break and consolidate above the middle of the 1.1158 channel. Only from there can we expect an upward correction to the upper limit of 1.1237, where I recommend profit taking. In case there is no demand for the euro around the low of 1.1063, long positions are best postponed until the test of the larger levels of 1.0992 and 1.0957. However, I would not expect a strong rebound from these ranges. A maximum of 20-30 points within a day.

To open short positions on EURUSD, you need:

Judging by the Fed's decision and the lack of reaction in the market, the bearish trend will continue in the pair. Sellers need to form a false breakout in the resistance area of 1.1158, which will be a signal to open short positions. A more important goal will be a breakout and consolidation below the support of 1.1063, which will raise pressure on EUR/USD and lead to an update of the lows in the area of 1.0992 and 1.0957, where I recommend taking profits. Given the absence of important fundamental statistics and the Eurogroup meeting, the return of the bulls to the resistance of 1.1158 may lead to an upward correction of the pair to the high of 1.1237, from where I recommend opening short positions immediately on the rebound.

Indicator signals:

Moving averages

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

Bollinger Bands

In case the euro declines, the lower boundary of the indicator around 1.1063 will provide support , while the growth may be limited by the upper level of the indicator in the area of 1.194.

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

Elliott wave analysis of GBP/JPY for March 16, 2020

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GBP/JPY has seen a second dip to just below our ideal target at 131.12 (the low has been seen at 130.96). To indicate a bottom is in place, we now need a break above minor resistance at 133.04 and more importantly a break above resistance at 134.32 that will confirm wave 2/ has completed and wave 3 is in motion.

Until a break above resistance at 134.32 has been seen, we must accept that the trend remains down, but the loss of downside momentum indicates a bottom should be in place very soon.

R3: 134.32

R2: 133.04

R1: 132.12

Pivot: 130.96

S1: 130.40

S2: 129.91

S3: 129.14

Trading recommendation:

We are long GBP from 131.20 with our stop placed at 130.95. If our stop is hit, we will rebuy GBP upon a break above 133.04

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

#USD Index Price Movement For March 16, 2020

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The USD Index is likely to retrace to the OTE (Optimum Trade Entry) and the 79% level from the Fibonacci retracement. It will try to overcome the liquidity pool at the 98.58-98.66. As long as the #USDX does not decline bellow the 97.35, the US dollar may grow to 98.58-98.66.

The overall bias for #USDX is bullish.

(Disclaimer)

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Overview of the GBP/USD pair. March 16. Because of Brexit, the coronavirus vaccine will arrive in the UK later and will cost

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: -122.0091

The British pound continues to fall against the US currency. We have already said in the final article for the past week that the fall of the currency by 10 cents in 5 days can not be characterized in any other way than a collapse. The most interesting thing is that even on Friday, at the close of the trading week, there were no signs of the beginning of a correction. Thus, we draw the same conclusions as for the EUR/USD pair: the market is in a state of panic, so movements can be in any direction and with any force. When opening any positions, this point should be taken into account.

As we have already said, macroeconomic statistics now have almost no effect on traders. However, there will be several reports to pay attention to during the new trading week. In fact, any macroeconomic information is now important only as part of tracking the overall trend. In other words, how much will any single economy slow down? But each individual report does not matter much. We have already discussed the Fed meeting in the article on the euro/dollar. We believe that this is the only event this week that can really change the trading priorities of market participants. And then only if Jerome Powell goes for another interest rate cut. Only this decision of the Fed can stop the strengthening of the dollar fundamentally. However, we do not want traders to get the impression that only the Fed meeting can stop the strengthening of the US currency. We still believe that the downward movement can end at absolutely any moment. Moreover, at any moment, the pair can begin to grow no less strongly. For no apparent reason. Once again, we draw the attention of market participants: the rise or fall of the dollar, pound or euro does not depend on what is happening in the US stock market, and does not depend on the confidence or lack of confidence in a particular currency, as a "safe haven currency".

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Returning to the statistics from the UK, we should note the reports on wages for January, the unemployment rate for January, as well as applications for unemployment benefits for February (all these data will be published on Tuesday). No more interesting statistics will be received from the UK until the end of the week. As for the most significant report on wages in the Foggy Albion, experts expect even a slight acceleration of this indicator compared to January. Taking into account bonuses, salaries can grow by 3%, and without taking into account - by 3.3%. Unfortunately, it is unlikely that these optimistic data (if they turn out to be such) will support the British pound.

Against the background of the latest news about the COVID-2019 virus, the topics of Brexit and the UK-EU trade negotiations have completely disappeared from the front pages of newspapers. If there is absolutely nothing to say about trade negotiations now, since there is simply no new information, then Brexit may once again affect London before the final "break", scheduled for December 31. According to experts in the fields of medicine and law, the UK will have to wait longer for the "coronavirus" vaccine and pay more for it, since it has already formally left the EU. Thus, if the necessary vaccine is developed in the European Union, London may face problems in obtaining it as quickly and as simply as possible. However, while there is no vaccine against the virus, the British government is trying to contain the growing scale of the pandemic by isolating all residents of the country over 70 years old. This was stated by Health Minister Matt Hancock. As the government plans, elderly people will be forbidden to go outside, all necessary food and medicine will be delivered directly to the door, and they will also be prohibited from receiving guests. Also, Prime Minister Boris Johnson intends to call on British companies to produce more artificial ventilation devices to help doctors cope with the epidemic. If necessary, the government will be ready to rent any necessary number of beds in private clinics.

From a technical point of view, the most important at this time, the downward movement continues. All indicators are directed downward, so now the trend for the pound/dollar pair is absolutely downward.

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The average volatility of the pound/dollar pair over the past 5 days is 256 points and continues to grow. The last two trading days were absolutely record-breaking for the pound - 350 points were passed for each day. With that in one direction. On Monday, March 16, we expect the pair to move within the volatility channel of 1.2017-1.2529. This pair is likely to move back to the lower border.

Nearest support levels:

S1 - 1.2207

S2 - 1.2085

S3 - 1.1963

Nearest resistance levels:

R1 - 1.2329

R2 - 1.2451

R3 - 1.2573

Trading recommendations:

The GBP/USD pair continues its strong downward movement. Thus, the current sales of the pound remain relevant with the targets of 1.2207 and 1.2085, before the reversal of the Heiken Ashi indicator to the top. It is recommended to return to purchases of the British currency with the target of 1.2939, not before fixing the price above the moving average line, which is not expected in the near future for obvious reasons (the price is too far from the moving average). 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.

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

Overview of the EUR/USD pair. March 16. Key event of the week: Fed meeting. Will Jerome Powell accept another rate cut?

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) - downward.

CCI: -160.7397

The new trading week for the EUR/USD currency pair begins with the same downward movement, with the same record-high volatility. To be honest, we do not yet see any reason for traders to get out of a state of panic. The situation with "coronavirus" is still not resolved and, according to the latest data, the number of infected has increased to 156,000. Thus, the virus continues to spread across the planet, respectively, and the markets will continue to be in a very excited state. Based on this, any day there may be a new reversal of the quotes up. The downward movement may become even stronger. In general, we believe that the "storm" will continue. It is good that there are not too many macroeconomic publications planned for this week. To be honest, it is painful to see how important reports are ignored by market participants. However, important information not related to the "coronavirus" will also abound this week.

Monday could have been a half-day off if not for the panic in the currency and stock markets. There are no important publications scheduled for this day, but we all understand that at any moment, an important statement may be made by, for example, Donald Trump or someone from the EU government, or a speech by the head of Central banks. Thus, traders can get additional reasons to participate in trading even more actively at any time.

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On Tuesday, the United States will publish an index of retail sales for February. It is expected that the indicator will grow by 0.2% on a monthly basis, but we believe that starting from February, a general slowdown in the economic indicators of almost every country in the world may begin due to the situation with the "coronavirus". Thus, the actual figures may differ significantly from the forecast. We would also like to note once again that traders pay very little attention to macroeconomic statistics now, so such an insignificant report will be ignored with a probability of almost 100%.

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Also scheduled for this day is the publication of industrial production in the United States for February, which continued to slow down in the last year and a half and without any "coronavirus". It is expected that the annual decline will continue, and a small increase of about 0.4% will be recorded on a monthly basis. We believe that this indicator will not attract the proper attention of traders.

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Wednesday will rightly be considered the most important day of the week since on this day the final inflation in the European Union for February will be published. According to experts' forecasts, the consumer price index will slow down to 1.2% y/y, as indicated by preliminary values. And late in the evening, the planned meeting of the Federal Reserve will take place, during which the key rate may be lowered once again. No important news is scheduled for Thursday or Friday.

Thus, the key event of the week will be the new meeting of the Federal Reserve. It is difficult to say what to expect from Jerome Powell, who only recently lowered the rate by 50 basis points. Trump is demanding that Powell has lowered interest rates to zero. However, the Fed still continues to show that it is independent of the US President and is unlikely to meet Trump's requests. Experts are inclined to believe that the Federal Reserve may well go for a new easing of monetary policy by 50 basis points. Thus, the key intrigue of the week will be the Fed's decision on the rate, as well as market reaction to this decision. After all, in the last week, the US currency has strengthened against both the pound and the euro. Will the winning pace in the dollar continue if the Fed will once again take a "dovish" stance?

We still believe that it is not particularly important which Central Bank takes what measures. If the majority of traders, major players, and speculators believe that it is safest to keep money in dollars, then the dollar will become more expensive. It doesn't matter how much the Fed eases the rate. However, this opinion may change. Also important will be the Fed's press conference, during which new judgments may be made about the fight against the "coronavirus" and its impact on the US economy and the world.

From a technical point of view, most indicators indicate a downward trend. The fastest Heiken Ashi indicator is directed downward and there is no sign of its upward reversal yet.

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The average volatility of the euro/dollar currency pair remains at record values and continues to grow. At the moment, the average volatility for 5 days is already 179 points. This value once again confirms the fact that the markets remain in a very excited state and can move in any direction with a new force at almost any moment. Thus, on Monday, we again expect a decrease in volatility and movement within the channel, limited to the levels of 1.0927 and 1.1285.

Nearest support levels:

S1 - 1.1108

S2 - 1.0986

S3 - 1.0864

Nearest resistance levels:

R1 - 1.1230

R2 - 1.1353

R3 - 1.1475

Trading recommendations:

The euro/dollar pair continues a strong downward movement. Thus, it is now recommended to continue to consider the sale of the euro with the targets of 1.0986 and 1.0927, before the reversal of the Heiken Ashi indicator to the top, which will indicate a possible correction. It will be possible to return to the pair's purchases no earlier than the price-fixing above the moving average line with the first target of 1.1353.

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 16, 2020

EUR/USD

The US Federal Reserve held an extraordinary meeting of the FOMC on Sunday, March 15, and lowered the base rate from 1.25% to 0.25% with the announcement of the $700 billion QE program, which exactly repeats the "Paulson plan" in 2008. Today, the euro rose by 90 points in the Asian session, but it began to retreat when strong resistance was found on the Fibonacci level of 23.6% on the daily chart. The condition for continuing the decline will be price taking under the daily MACD line, at 1.1070. The 1.0978 goal opens – support for the embedded price channel line.

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But at the moment, the price remains in a growing position. The price twice, on Thursday and Friday, tested the support of the MACD line and sharply went up each time. The signal line of the Marlin oscillator shows the intention to turn up.

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On the four-hour chart, the target growth level is the MACD line at 1.1300. The market's intention will likely become more clear when the US session opens. The relative calm in the market is explained by the fact that investors were already prepared for such a rate cut, although at the planned time on the 18th. At the scheduled meeting on Wednesday, it is likely and expected that the Fed will target the yields of long-term government bonds. These measures can turn the markets into growth (the euro is much higher than 1.1300), but in contrast to the situation in 2008, when QE was launched almost at the end of the market, now the crisis has not yet been fully disclosed. We only see the financial crisis, but it is likely to deepen into broader economic areas. In other words, market uncertainty has increased. We are waiting for technical signals to form.

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

Forecast for AUD/USD on March 16, 2020

AUD/USD

Economic data for China for February came out this morning, and the figures were much worse than forecasted. Industrial production collapsed by -13.6% y/y, fixed investment fell by 24.5% y/y, retail sales fell by 20.5% y/y, while unemployment rose from 5.2% to 6.2 % The Chinese A50 stock index is losing 1.64%. But the Australian stock market is even worse - a drop of 7.63%. Australian investors felt that the Fed's emergency measures are only evidence of a growing recession in the United States, and near-zero rates could re-develop the mortgage crisis and lead to a chain of bankruptcies.

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But such a strong negative reaction of the Australian market may turn out to be a temporary phenomenon that will change with the growth of the US market, if, of course, such growth occurs. On the daily chart, the price of the Australian dollar came close to the point of intersection of the embedded line of the price channel with the Fibonacci level of 161.8% at the price of 0.6065. From this point, a correctional reversal can be formed with targets 0.6222, 0.6295. Going the price below the level opens the target 0.5850, also formed by the point of intersection by the lower line of the price channel and the Fibonacci level (200.0%).

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On the four-hour chart, the signal line of the Marlin oscillator shows the intention to turn out of the oversold zone, but this does not stop the price from making another low. We are waiting for the development of events.

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

Forecast for USD/JPY on March 16, 2020

USD/JPY

On Monday morning, Asian markets were not prepared for an emergency Fed rate cut from 1.25% to 0.25%, as they expected such an action on Wednesday, the day of the planned meeting of the regulator. Chinese economic data for February were also worse than forecasts. China's industrial production declined by 13.6% y/y, fixed investment declined by 24.5% y/y, retail sales fell by 20.5% y/y, and unemployment rose from 5.2% to 6.2%. The Chinese stock index China A50 is losing 1.40%, the Japanese Nikkei 225 is down 0.12%, while the yen is strengthening by 70 points.

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Friday's growth of the USD/JPY pair stopped at the balance line of the daily scale. The current correction occurs to the range of two lines of the price channel. The signal line of the Marlin oscillator unfolds from the boundary with the territory of the trend growth.

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The first goal of local price reduction is the MACD line on the four-hour chart at the price of 104.90. Anchoring it breaks off the second goal of 102.88 - support for the embedded price channel line. Further growth is possible after consolidating the price above Friday's closing price of 107.96, the target will open on the MACD line on the daily chart of 109.20.

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

Coronavirus: likelihood of a crisis and recession is much higher than a quick victory over the epidemic

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Unfortunately, the key topic for the whole world is the pneumonia virus called COVID-2019. All currency pairs and instruments continue to trade in full alert mode. All macroeconomic factors continue to be ignored by market participants, and experts in the medical field believe that the coronavirus is likely to continue to spread across the planet. Unfortunately, humanity faces various diseases from time to time, but if the previous disease was localized and defeated relatively quickly (SARS virus), this does not mean that the current disease will also be quickly defeated. A lot of films have been made on this topic, some of them surprisingly accurately reflect the spread of infection (for example, the 2011 film "Contagion", which was noted by all scientists as a reliable reflection of scientific facts). In the current conditions, this film can be recommended for viewing by everyone.

Once again, it should be said that, in principle, predicting the spread of any infection is divination on coffee grounds. It is impossible to accurately predict the extent of the virus, when it is not even known for sure how long it can live outside of a living organism and what all the ways of its transmission are. Usually, when predicting a similar case of the disease, parallels are drawn between the rate of spread, mortality, number of people who have recovered, and so on... In fact, now that there is no vaccine against the virus, the main task of all countries of the world is to localize the disease, that is, stop its spread. But for this, as it turned out, you need to enter a quarantine, isolate all sick or infected people. It is obvious that such measures will have a very bad impact on the economy. For example, in Italy, a country where tourism is extremely developed and is one of the main sources of income, the quarantine will have devastating consequences. In addition, in any case, industrial production is reduced, companies are closed for quarantine, business activity falls accordingly, and so on. And in each country, the same will be observed, taking into account the local specifics.

A big problem, in addition to the relative ease of distribution, is also the huge number of questions that scientists do not yet have answers to:

1) What will be the extent of the disease in non-developed countries? Will efforts to control and contain the virus in developed countries be in vain if less developed countries remain infected?

2) China managed to contain the pandemic, will it be possible to do this in other countries?

3) Is the disease seasonal? In other words, is the virus susceptible to heat or cold, and is it equally dangerous in summer, spring, and winter?

4) What is the percentage of fatalities in developed and undeveloped countries?

5) what is the probability of new waves of infection in countries that seem to have already managed to stop the spread of the virus?

As we have already found out in the previous article, in any case, the consequences for the economy will be negative. In any case, individual sectors of the economy will suffer very much. For example, airlines. Given the fact that many countries, especially such large ones as the United States, have closed partially or completely air traffic, it is natural that airlines will incur losses. At least, during the second quarter of 2020. If the epidemic can be contained quickly, recovery may begin in the third quarter. What if we can't localize it quickly? Some companies may suffer losses so large that they will be forced to declare bankruptcy. The longer air transport and any international transport in general will remain quarantined, the longer the quarantine will be in effect in countries, the more the demand for oil will decrease and, consequently, the price of all types of fuel will be extremely low. In turn, this will hit commodity countries and their currencies, and cause a certain crisis and economic slowdown. The worst thing for us, traders, is that the situation in the currency market is unlikely to stabilize in the near future. Market participants, major players, and investors either panic or urgently transfer their funds to the safest assets, which, of course, negatively affects risky assets and currencies. When the EUR/USD pair regularly passes 100-150 points per day, this makes it completely unattractive to trade for most traders who are used to volatility of 40-60 points. Thus, our personal forecasts are as follows: the currency market crisis will continue for at least some time, perhaps two or three weeks; until we find ways to completely block the spread of infection or find an effective vaccine against it, we should not wait for the global economy to recover. In the near future, the macroeconomic indicators of all countries of the world may begin to fall synchronously, despite the actions of central banks to stimulate.

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

Around 15 to 70 million people can die from the coronavirus. Three scenarios have been developed for the global economy

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The Chinese COVID-2019 pneumonia virus has already captured more than 100 countries around the world. More than 130,000 people are infected and about 5,000 have died. However, scientists and analysts around the world warn that this may only be the beginning. The new virus differs from the others in that it spreads very easily. Scientists suspect that the virus can survive even outside the human body, for example, on ordinary surfaces made of plastic, iron and others that a person touches. Moreover, it may take up to two weeks before a person feels unwell and goes to a doctor or self-isolates at home. How many people can it infect in two weeks? And how many people from this number who are already infected will transmit the virus, in turn, to other people, also without knowing that they are carriers of the virus?

Australian scientists have tried to model the picture of the spread of the virus and calculate possible losses. According to the most conservative estimates, the CODID-2019 virus will take the lives of about 15 million people. It is difficult to say how accurate and correct these calculations are if the death rate is no more than 5%, but if the virus really continues to spread with such ease, these figures will no longer seem improbable. The losses of the world economy in this case will exceed two trillion dollars. This variant was modeled on the "Hong Kong flu" of 1968-1969, which killed a million people. However, scientists also report that a more severe scenario is possible, in which more than 70 million people will die, and it will spread like the "Spanish flu" in the 20s of the previous century. If you can't find a vaccine for this virus (meaning in the near future) and you have to fight it with traditional medicines, but you can't prevent the disease in any way, then sooner or later everyone on the planet can get infected, despite the quarantines imposed in many countries and the termination of air traffic. In this case, the virus can become an annual phenomenon that worsens during certain periods of the year. Then the epidemic can take the lives of 15 million people every year. The damage to the global economy will amount to tens of trillions of dollars. Also, Australian scientists note that it is too late to close the borders, since the virus has already spread across the planet.

Meanwhile, economists and analysts are also developing possible scenarios for the consequences for the global economy. According to experts, there are three possible options: a rapid economic recovery based on a successful outcome of the fight against the virus, a global economic slowdown and further spread of the virus, and a global recession.

Under the first scenario, global economic growth is expected to fall to about 2% this year. The largest economies, the US and China, will recover fully in the second quarter. However, it is noted that this option is too optimistic and implies a seasonal spread of the virus. It is also assumed that the population will remain economically active, and the measures taken by the governments of the countries will be as effective as in China.

In the second scenario, it is also assumed that the virus is seasonal but it more realistically reflects the inequality of opportunities in many countries. Therefore, the fight against coronavirus in some countries (developed) will be successful, in others (less developed) – not. In this way, some countries will be able to control the epidemic, while others will not, and the spread of the virus will continue. In this case, the growth rate of world GDP will be reduced by half, but a recession will still be avoided. Small and medium-sized businesses are expected to suffer the most.

In the last, third, variant, it is assumed that the virus is not seasonal, which means that at any time of the year it will spread freely and easily. In this case, it will spread around the world, including hotter and colder countries. In this case, the growth of the world economy may be reduced to -1.5%. This is already a recession. The entire year 2020 will be fully dedicated to the fight against the new disease.

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

GBP/USD. March 15. Results of the week. Pound drops 10 cents in a week. We are only at the beginning of a new crisis. We

4-hour timeframe

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Amplitude of the last 5 days (high-low): 103p - 165p - 233p - 172p - 358p.

Average volatility over the past 5 days: 207p (high).

What can we say about the past week for the GBP/USD pair? In short, the markets have been in absolute panic all week. Once again, we can note the collapse of oil, quotes of US stock indexes, as well as many currencies. We still believe that it is impossible to predict the movement of any currency pair based on fundamental events or macroeconomic statistics. Technical analysis predicts the future more or less accurately now. From the last local high (March 9 – Monday), the pound/dollar pair lost 930 points. For a week – 930 points! Almost 10 cents... What can explain such a collapse in quotes, if not panic? No fundamental events could provoke such a fall, especially given the fact that the pound was steadily rising in price just a week ago. Of course, you can link what is happening on the pair with the decisions of the Federal Reserve and the Bank of England on monetary policy. First, the Fed lowered the rate by 0.5%, and then the British regulator made a similar decision. The fall of each currency did not start with the central bank meeting. But from a technical point of view, everything is logical. On the 24-hour timeframe, traders tried to start a new upward trend (absolutely unfounded fundamentally), but failed to overcome the Senkou span B line, after which the downward movement began. If you do not pay attention to what is happening now in the world (in the last two weeks), we have long warned that sooner or later the pound will fall. No, the pound has not had and will not have any reason to grow in the near future. The only thing that can really provide long-term support for the British currency is if the Fed reduces the key rate so much that it will be lower than in the UK. This is the only chance for the pound to change the unfavorable balance of forces with the US currency. However, at the moment, the rate in the United States is 1.25%, and in Britain – 0.25%. Thus, Donald Trump will need to make a lot of effort to convince Jerome Powell to go for more and more easing of monetary policy. And even taking into account the most important factor – the difference in the strength of monetary policies between countries, note how much the pound rose when the Fed lowered the rate, and how much the dollar rose when the BoE lowered the rate. Thus, we do not expect that something will change dramatically in this factor in the near future.

The overall picture remains as unsightly in the UK as it was. Just now all the problems in Britain, of which there were extremely many, are multiplied by the coronavirus, which only makes things worse. We would like to remind you that the epidemic will end sooner or later, hopefully without major losses. The question is with what losses each country will come out of it and how much the economy of each individual country will slow down. Recall that before the panic of the last two weeks, the British macroeconomic statistics from time to time disappointed traders, while the US data were strong and stable. Thus, even if we assume that both these economies will suffer the same losses, then again the balance of power will not change between the British pound and the US dollar.

Thus, it is best to wait for the end of the epidemic, or at least its localization, or at least a slowdown of its spread. Without this, it is naive to expect that the markets will calm down and return to normal. Any macroeconomic statistics do not matter now. The economy of each individual country may begin to shrink. The coronavirus is likely to continue to spread. Panic is already present not only in world markets, but also among the civilian population, especially in European countries, where everything is being swept off the shelves in grocery stores. People buy food and do not go out on the street once again. On the one hand, this is good, there is a chance that the growth rate of the epidemic will decrease. At the same time, if people stay at home, it means that production and services are not being provided. The economy is not working, and GDP is declining. Thus, we believe that we are only at the very beginning of a crisis that is only gaining momentum.

From a technical point of view, the main question now is when the correction will begin. The MACD indicator can start to run low at any time, since it cannot fall constantly. Neither currency can fall constantly, but in the current conditions, the movement in one line can continue for a very long time. You need to be prepared for any scenario.

Recommendations for short positions:

On the 4-hour timeframe, the pound/dollar pair continues its strongest downward movement and overcame all the target levels for this week. Those traders who remain in sell positions can hold them for the purpose of the support level on the 24-hour timeframe of 1.2152. A reversal of the MACD indicator up with a parallel price increase may indicate the beginning of a correction. Opening new shorts, from our point of view, is dangerous now.

Recommendations for long positions:

It is recommended to buy the GBP/USD pair only if the quotes return to the area above the critical line with the goal of the first resistance level of 1.3150. However, this development is not expected in the near future. When opening any positions, it is recommended to act as carefully as possible and keep in mind the heightened 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

GBP/USD. How low will the pound fall?

The British currency was among the most affected assets at the end of the week: it plunged by almost a thousand points against the greenback: if GBP/USD tested the 31st figure on Monday, March 9, yesterday, traders updated the annual low at 1.2260. It is worth noting that at the end of Friday's trading, the dollar index paused its growth, allowing many currencies of the major group to slightly win back their positions. The euro, Canadian dollar, franc, Australian dollar – all these currencies showed a slight correction when traders began to take profits. The pound was an exception to this list – the British pound fell almost to the last minute of trading, demonstrating its helplessness and vulnerability.

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It is worth recalling that the GBP/USD pair demonstrated amazing resilience for a long time: despite rumors of a rate cut by the Bank of England, the decline in key macroeconomic indicators, disagreements between London and Brussels - all these powerful fundamental factors - the price stayed around the 30th figure. Even the strengthening of the dollar was often ignored by GBP/USD traders - the pound was in its coordinate system, allowing it to gradually build up long positions.

But last week, the US currency made a splash, unfolding in all pairs. Market participants began to use the dollar as a defensive asset, disappointed in all other instruments of a similar nature: the yen has lost almost 800 points over the past five days, gold has fallen from 1702.95 to 1504.33 (Friday low). If earlier panic in the market put pressure on the greenback, now panic is a catalyst for its growth. Macroeconomic reports and even prospects for easing the monetary policy of the Fed play a secondary role in this context. The market focuses only on the theme of the spread of coronavirus, sharply reacting to key events.

For example, yesterday US President Donald Trump declared a state of emergency in the country. This regime grants broad powers to the Minister of Health, which will no longer be restricted by certain existing laws and regulations. In addition, this regime allows you to allocate up to $50 billion to fight the pandemic from the national disaster management fund. At the same time, the number of cases of coronavirus in the United States exceeded 2,000 people, 47 of them died. The state of emergency in the United States has become another symptom of the escalation of the crisis, so the panic mood in the market has only increased. And since the main beneficiary of this situation is now the dollar, it has strengthened its position in all pairs, including the pair with the pound.

The British currency was the most vulnerable in comparison with the other participants of the major group. First, the coronavirus has not spared the UK. The total number of confirmed cases there rose to 800 (while on Thursday this figure barely crossed the 500-digit mark). At the same time, the British Ministry of Health admitted that the actual number of infected people may be from 5 to 10 thousand people. Because of the epidemic, local elections have already been postponed, not to mention sports tournaments. Second, the pound is under additional pressure from complex Brexit negotiations. The parties are still in different positions, demonstrating their peremptory attitude. There is also information that the next round of negotiations will be canceled due to the pandemic. In this case, it is unclear how London will be invested in the previously agreed terms, which are set by law. Most likely, the Parliament will still move the deadline – but the current uncertainty on this issue puts significant pressure on the British currency, which is compounded by the general strengthening of the greenback.

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We can assume with a hundred percent probability that the situation with the coronavirus will only worsen this weekend – the number of infected and dead will increase. This means that panic moods will continue to dictate their terms to the market, providing support for the US currency. In such conditions, you can only count on a correction of GBP/USD due to strong oversold, but you can only talk about a trend reversal if the dollar weakens overall.

From a technical point of view, the situation is as follows. On almost all the higher time frames (except MN), the GBP/USD pair is located on the lower line of the Bollinger Bands indicator under all the lines of the Ichimoku indicator, which formed a strong bearish Parade of Lines signal. This shows a clear advantage of the downward movement. The main goal of the downward movement is located on the lower line of the Bollinger Bands indicator on the monthly chart, i.e. at 1.2110.

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Ichimoku cloud indicator short-term analysis of Gold for March 16, 2020

Gold price ended last week on channel support. With Fed putting pressure on the Dollar Gold price opens higher in early Monday trading but still below key cloud resistance. It is important for bulls to break above the cloud otherwise we should expect new lows.

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Red lines - bullish channel

Gold price is trading around $1,550 at the open of the early Monday session. Gold price could pull back towards Friday's levels before continuing higher, if Dollar weakness remains.

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In Ichimoku cloud terms Gold price has a major resistance at $1,570 that must overcome. Staying below $1,570 would be a bearish sign and would push Gold price below $1,500. Breaking above $1,570 will push price towards $1,600 which the next resistance. Bulls want to see price first break above the cloud and start making higher highs and higher lows. The Chikou span is below the past price candlesticks and with resistance confirmed at $1,570, bulls need to break above it. The tenkan-sen and kijun-sen are still above the cloud but with negative slopes. So bulls have a lot of work ahead of them. Very interesting week ahead.The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis on EURUSD

Minutes ago the FED announced that its cutting rates to zero and the launch of a $700billion quantitative easing program. This will at least initially put USD under lots of pressure. As we explained in our last analysis EURUSD bulls want to see a higher low.

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Red lines - broken wedge pattern

Blue lines -Fibonacci retracement

Yellow rectangle- key support level

EURUSD is bouncing again after the FED intervention. Price had stopped at a major support level as we explained in our last analysis. EURUSD could very well have formed a higher low and could now start its new upward move that will eventually push price towards 1.17-1.18. For this to come true we need to see a sequence of higher highs and higher lows. At the same time we should not see price break below the yellow rectangle area and last week's lows.

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EURUSD has back tested successfully the Daily Ichimoku cloud and is now targeting the green rectangle area and the 100% extension of the first leg up. USA central bank is reacting to the effect on the markets by the corona-virus epidemic affecting Financial activity all over the world. This is expected to put a pressure on the dollar at least at first. If this weapon the FED chose is ineffective to support the markets, then we should see a collapse in EURUSD that will eventually bring price below 1.07.

Key short-term support is at 1.1050. Bulls do not want to see this level broken. We are bullish as long as price is above this level.

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