Technical analysis of GBP/USD for 20/03/2020:

Technical Market Overview:

The GBP/USD pair has made a temporary swing low at the level of 1.1412 and currently, the bulls are trying to bounce higher towards the nearest technical resistance located at the level of 1.1957. If the bounce fails, then the next target for bears is below the level of 1.1412, but it is hard to tell precisely as the current price levels have not been seen since the '90s, but if the coronavirus pandemic will intensify, then the parity level (1:1 GBP: USD) is very likely.

Weekly Pivot Points:

WR3 - 1.3660

WR2 - 1.3418

WR1 - 1.2726

Weekly Pivot - 1.2493

WS1 - 1.1781

WS2 - 1.1553

WS3 - 1.0829

Trading Recommendations:

The main Elliott Wave scenario has been invalidated, so now all the bullish impulsive waves are not very likely to happen. The market will continue the downtrend towards the parity. Trade safe.

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Technical analysis of EUR/USD for 20/03/2020:

Technical Market Overview:

The EUR/USD pair has bounced from the level of 1.0654 and is currently testing the local technical resistance located at the level of 1.0778 (key short-term resistance). In a case of a bounce, the next target for bulls is seen at the level of 1.0951, but this scenario is possible only if the momentum oscillator break higher through 50 levels. The market conditions are oversold on the H4 timeframe with momentum oscillating below the neutral level. If rally/bounce will fail, then the downtrend will continue as the financial markets are not done with the coronavirus pandemic fears.

Weekly Pivot Points:

WR3 - 1.1749

WR2 - 1.1625

WR1 - 1.1316

Weekly Pivot - 1.1171

WS1 - 1.0880

WS2 - 1.0735

WS3 - 1.0438

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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Indicator analysis. Daily review of EUR/USD on March 20, 2020

Trend analysis (Fig. 1).

Today, from the support line 1.0879 (red bold line) the price will try to rollback up with the target at 1.0966, a pullback level of 23.6% (red dashed line). If this level is reached, the continuation of the upward movement is with the next goal of 1.1068, a retracement level of 38.2.% (Red dashed line).

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Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - up;

- Fibonacci levels - up;

- Volumes - up;

- Candlestick analysis - up;

- Trend analysis - up;

- Bollinger Lines - up;

- Weekly schedule - up.

General conclusion:

Today, from the support line 1.0879 (red bold line) the price will try to rollback up with the target at 1.0966, a pullback level of 23.6% (red dashed line). If this level is reached, the continuation of the upward movement is with the next goal of 1.1068, a retracement level of 38.2.% (Red dashed line).

Unlikely scenario: from a pullback level of 23.6% - 1.0966 (red dotted line), work down with the target at the support line 1.0803 (blue bold line).

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NZD/USD Analysis For March 20, 2020

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The 30-period Commodity Channel Index is going down through 3 levels such as 100, 0, and -100 (blue circle & blue rectangle) and the candle is moving below the EMA 30 with the downward slope from the Moving Average. We know exactly that the kiwi has been trading with the bearish bias. Now this pair will try to reach the nearest Liquidity Pool at 0.5605 as long the CCI (30) does not pass upward (above the 0 level) and if the price makes a correction to not hgiher than 0.5913. Afterwards, the Liquidity Pool at 0.5605 will be broken.

The overall bias of NZD/USD is bearish.

(Disclaimer)

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GBPUSD and AUDUSD: The Bank of England intervenes in monetary policy and lowers rates to almost zero. The RBA begins redemption

The British pound revived slightly and managed to stay at the lows of 1984 after the Bank of England cut its key interest rate at an extraordinary meeting. Discussions about such measures have been going on for a long time, and given the worsening situation in the financial markets, there was no point in waiting for March 26 – that's when the next meeting of the Bank of England was scheduled.

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The regulator lowered the interest rate to 0.1% from 0.25% and announced that it was resuming bond purchases. The decision to reduce the key rate to 0.1% from 0.25% was made unanimously. At the same time, the Bank of England increased the volume of the bond purchase program by 200 billion pounds to 645 billion pounds, following the example of a number of other countries. Such measures are aimed at countering the economic damage caused by the coronavirus pandemic. This week, the regulator has already made quite a few decisions about allocating assistance to companies, employees and households affected by COVID-19. Management also concluded that it would resort to further monetary easing, if necessary, to address problems in financial markets.

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As I have already noted, the Bank of England's actions is not isolated. On Wednesday, the European Central Bank announced the launch of a new bond purchase program with a total value of more than 1 trillion euros, and the US Federal Reserve began actively increasing its bond purchases yesterday.

During his speech, the head of the Bank of England, Andrew Bailey, said that there is currently an emergency situation due to the spread of the virus in the world, but the Central Bank still has enough tools to counter this. Speaking after the emergency meeting, Andrew Bailey said that he does not support negative interest rates, but he did not rule out such a turn of events.

The measures taken by the Bank of England seem to have calmed the market a little. The yield on 10-year UK government bonds fell to 0.751% from 0.915% earlier.

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Yesterday, a number of statements were made from the rating agency Moody's, which did not greatly please traders, although it is clear that for the European continent, the coronavirus outbreak will sharply weaken the economic outlook. Moody's expects that the damage to Europe will be severe, but the overall impact of the virus depends on the duration of the consequences since, before the coronavirus outbreak, consumption in the EU grew steadily due to a good level of employment and a constant increase in wages.

As for the technical picture of the GBPUSD pair, much will depend on how soon the bulls recover from the blow received this week, and on the strength of the support of 1.1470, which resisted a series of attempts to break lower. Bears will actively defend the resistance of 1.1780, and only its breakout will strengthen the demand for the trading instrument, which will return it to the levels of 1.1920 and 1.2020. The lower limit of the current channel can be considered the annual lows of 1.1470, and this, by the way, is the volatility of 300 points, which can keep the pound in this range for a long time. Given that the crisis has not passed, it is best to consider short positions on the pound after significant corrections to major support levels.

AUDUSD

Today, it became known that the Reserve Bank of Australia, following the example of other countries, announced the launch of a quantitative easing program, setting a target yield level for 3-year bonds. The report indicates that the regulator will buy bonds worth 5 billion Australian dollars.

During the speech, the Prime Minister of Australia said that we are working on a package of measures to mitigate the effects of the virus over the next 6 months, and the new measures will include support for people affected by the economic downturn. Let me remind you that the United Kingdom and the United States have already resorted to such options for helping citizens. Morrison also noted that additional support measures will be provided for small and medium-sized companies.

As for the technical picture of the AUDUSD pair, volatility also remains at a very high level and we should not expect that the bulls will be able to quickly compensate for all the decline that has been observed since the beginning of March this year. The next resistance levels are visible in the area and 0.5970 0.6165. In the scenario of another pressure on the trading instrument, support will be viewed in the area of 0.5670 and at the annual minimum in the area of 0.5500.

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Simplified wave analysis of EUR/USD and AUD/USD for March 20

EUR/USD

Analysis:

The price decline in the euro chart, which started on March 9, refers to a large-scale movement, no less than D1. The price has reached the potential reversal zone of the weekly timeframe. There are no reversal signals on the chart yet.

Forecast:

The price rise that started yesterday does not exceed the level of the pullback of the last section of the current wave. It is common to the flat attitude of the movement between the closest opposing zones. A downward trend is likely in the European session.

Potential reversal zones

Resistance:

- 1.0760/1.0790

Support:

- 1.0670/1.0640

Recommendations:

Given the pronounced impulse nature of the current decline, purchases of the European currency are irrelevant. Sales of the tool are recommended.

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AUD/USD

Analysis:

As a result of a downward spurt of 10 price figures over the past decade, the dominant bearish wave reached the upper limit of the preliminary completion zone. The price rise that started yesterday has a high wave level. If confirmed, it can become the beginning of a counter wave.

Forecast:

If the price correction that started yesterday does not go beyond the scale of the upward movement, conditions will be created for changing the inter-day trend. Today, a mostly downward mood is expected. The daily price move is likely to be no lower than the far support zone.

Potential reversal zones

Resistance:

- 0.5930/0.5960

Support:

- 0.5840/0.5810

- 0.5700/0.5670

Recommendations:

Without the appearance of unambiguous reversal signals, "Aussie" purchases are highly risky. When trading on the market of this pair, sell signals remain in priority.

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Explanation: In the simplified wave analysis (UVA), waves consist of 3 parts (A-B-C). The last incomplete wave is analyzed. The solid background of the arrows shows the formed structure and the dotted one shows the expected movements.

Note: The wave algorithm does not take into account the duration of the tool movements in time!

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Control zones for USD/JPY on 03/20/20

Today's movement of the pair in the Asian session indicates that there is interest in buying the Japanese yen. In the case of the formation of a downward correctional model, the main goal can be considered a weekly control zone 108.14-107.84. Now, declining to this zone will allow you to get favorable purchase prices in the future and fix the sales of the instrument.

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The upward movement remains a medium-term impulse, so the probability of updating the monthly maximum is above 75%.

An alternative model will be developed if growth resumes from current levels. This will not allow you to get favorable prices for the purchase. The nearest goal of growth will be the February maximum, located at the level of 112.23.

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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.

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Control zones for NZDUSD on 03/20/2020

The current position of the Asian session regarding yesterday's trading indicates the presence of demand for the New Zealand dollar. If the close of today's trading occurs above the open, this may serve as the first signal for a medium-term accumulation zone to form, where deals from the boundaries of the range come to the fore.

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An important element in building an accumulation model will be the position of Asian sessions relative to each other. Today's close of trading should be higher than when trade opened yesterday. This will indicate an upward priority in the next couple of days.

The downward movement remains a medium-term impulse, therefore, the growth will allow you to get favorable prices for selling the instrument in the future. The first goal of growth is yesterday's high, the next goal will be at the high of the current week. If a false breakout pattern forms in yesterday's high, it is necessary to close all purchases and consider selling the instrument.

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

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

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

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GBP/USD Engulfing Announces Pullback

GBP/USD is trading at 1.1645 level above 1.1463 today's opening price and it could climb higher if the Bullish Engulfing pattern will be confirmed tomorrow by a bullish candle. The pair has dropped from 1.3091 to 1.1423 in only eight days. Now it seems too oversold to continue the bearish movement.

Technically, a potential rebound is somehow natural after the massive drop, even if the bearish pressure is high. GBP/USD rallied today as the USDX dropped. However, you should be careful because the US dollar Index remains bullish and a further increase could force the pair to drop deeper. The pound sterling suffered big losses after the BoE measures to fight and combat COVID-19 took the toll.

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GBP/USD has plunged after the failure to reach and retest the upper median line (UML) of the descending pitchfork, the price has registered only a false breakout above the inside sliding line (sl). I've said that the pair could register a larger corrective phase after it has closed the gap up from March 9, the aggressive breakdown below the second sliding line (sl1) has confirmed the bearish momentum.

The price almost reached the next downside target at the lower median line (LML) of the descending pitchfork. A failure to reach this potential target signals a potential bullish momentum even towards the median line (ML) of the descending pitchfork.

We'll see what will happen because the price could drop anytime, but if the bullish engulfing is confirmed and if the price stays away from the LML, GBP/USD could climb higher. The upside targets are seen at the 50% Fibonacci line, 1.2014 level and at the median line (ML).

  • TRADING TIPS

GBP/USD remains under pressure despite today's rally. It could increase in the short term if the Bullish Engulfing pattern is confirmed tomorrow and if the price fails to reach the lower median line (LML) of the descending pitchfork.

The 50% Fibonacci line is seen as a first upside target, a valid breakout above it will send the price at least till the 1.2014 static resistance (support has turned into resistance). A further drop could be confirmed when the price breaks below the LML, when we'll have another low.

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World Central Banks flood markets with liquidity amid wide stimulus measures (an increase in gold prices and a continued

By the end of the third week, after investors realized the consequences of the influence of the corona virus on the global economy, almost all of the world Central Banks had already distinguished themselves by taking measures and starting their implementation aimed at supporting their national economies.

At the end of the week, we can say that the ECB, the Central Bank of Japan and Switzerland, headed by the Federal Reserve, chose a "proven" way to deal with crisis phenomena by pumping up the financial system of their countries by all possible means. On Thursday, the Bank of England joined this club of fighters with the consequences of the coronavirus, which cut the key interest rate to 0.1% from 0.25% and expanded incentive measures, that is, the repurchase of assets to 645 billion pounds. The growth amounted to 445 billion from the previous volume of 200 billion. By the way, the Reserve Bank of Australia also launched a quantitative easing program today in the amount of 5 billion Australian dollars.

On Thursday, the situation calmed down somewhat in the markets. Oil quotes almost leveled their landslide decline on Wednesday and continue to rise on Friday. Today, Asian stock indexes are in the green zone, which are growing after the positive dynamics on Thursday of US and European stock indexes. At the same time, futures for US and European stock indexes also show upward momentum before the opening of trading in Europe.

The expected depreciation of the US dollar, higher gold prices, as well as the weakening of the yen and the franc against the dollar can be noted in the currency market, against the backdrop of a slight decrease in market tensions.

It seems that investors began to seriously digest the massive measures taken by the world Central Banks aimed at supporting the economies of their countries, stabilizing financial systems that they had never seen at close range, being influenced by panic. However, despite a slight shift in sentiment, it is still too early to say that all the worst in the markets has already happened. In our opinion, the remaining time until the end of March may become decisive, when either the pandemic situation in Europe and the United States will still be taken under control or not.

Assessing the general situation, we believe that a decrease in panic in the markets will lead to a weakening of the US dollar and an increase in the overall, although cautious demand for risky assets.

Forecast of the day:

Gold receives support amid a weakening dollar. We believe that a decrease in panic moods, as well as breaking through the level of 1500.00, can lead to its recovery to 1554.00.

The USD/CAD pair continues to adjust downward in the wake of a rise in crude oil prices, as well as a weakening US dollar. We believe that it can decline to our target of 1.4335 yesterday, and then continue to decline to the level of 1.4200, if positive mood in the markets continues.

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Elliott wave analysis of EUR/GBP for March 20 - 2020

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EUR/GBP found resistance at 0.9500. It is correcting in wave iv. With the 23.6% corrective target already broken at 0.9212, we expect the pair to lower to the 38.2% corrective target at 0.9034 before wave v takes over for the final rally higher towards the 0.9742 target.

The financial markets remain uncertain due to the corona pandemic and the financial havoc it can bring. At this point we don't know how many will be unemployed, the number of possible bankruptcies and a possible recession that follows this pandemic. All these factors will weigh on the financial markets.

R3: 0.9337

R2: 0.9258

R1: 0.9205

Pivot: 0.9161

S1: 0.9122

S2: 0.9095

S3: 0.9034

Trading recommendation:

We are short EUR from 0.9190 and we will take profit at 0.9055

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Elliott wave analysis of GBP/JPY for March 20 - 2020

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GBP/JPY found support at the channel support-line at 123.71. It is likely to enter the correction phase in the coming days to 132.05 and maybe even closer to 134.52 (the 50% corrective target of wave iii) before wave iv completes and the final decline in wave v close to 123.02 unfolds. This should complete the decline in wave 2 or B and set-up the possibility for a huge rally in the weeks months ahead.

The financial markets remain uncertain due to the corona pandemic and the financial havoc it can bring. At this point we don't know how many will be unemployed, the number of possible bankruptcies and a possible recession and pandemic will continue to weigh on the financial markets.

R3: 131.15

R2: 130.64

R1: 129.54

Pivot: 128.61

S1: 127.74

S2: 126.87

S3: 125.90

Trading recommendation:

We will stand on the sideline

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Control zones for USDCAD on 03/20/2020

The current decline of the pair is corrective to a strong medium-term bullish momentum. Therefore, sales should have target levels and quickly move to breakeven. Today, the pair is trading within the weekly control zone of 1.4424-1.4401. Fixing below this zone will indicate the continuation of the pair's decline to the next target zone of 1.4166-1.4144.

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Yesterday's sales can already be converted to breakeven. There are no formed conditions for purchases yet. Today's fixing below the weekly short-term limit will allow you to once again enter the sale of the instrument.

An alternative model for continuing growth without a deep correction will develop if the closing price is higher than the weekly control zone of 1.4424-1.4401. This will allow you to consider purchases, the first goal of which will be to update the monthly maximum.

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

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

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

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Bitcoin price movement for March 20, 2020

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As we see on the 4-hour chart, the CCI (30) grew and broke the 3 levels -100, 0, and 100. The Candle is already moving up. It may break the EMA (30). Bitcoin is likely to test the nearest liquidity pool at 6741.45 as the correction from the previous trend. Pay attention to the CCI (30) if it decreases below the 0 level and or the price closes bellow 4973.75 , then the scenario will be canceled and bitcoin will continue to fall.

The overall bias for bitocin is bearish.

(Disclaimer)

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

GBP/USD: plan for the European session on March 20. Bank of England rate cut to 0.1% did not affect the pound. Bulls protect

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

A false breakout in the support area of 1.1470, which is clearly visible on the 5-minute chart, after the Bank of England reduced interest rates to the level of 0.1%, indicates the presence of large buyers in the market. However, they will not be able to hold the 1.1470 area indefinitely, so an important task of the bulls is to return the resistance to 1.1667, which will lead the pound to grow to a high of 1.1778, getting above which will be quite problematic. In the scenario of a downward correction, and do not forget that the bear market persists, and nothing much has changed, it is best to return to long positions only at a false break of the level of 1.1563, or after another test of the year's low of 1.1470. Do not forget about placing stop orders, as a break in this area will lead to a new major sell-off of GBP/USD.

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

Sellers yesterday showed themselves very well in the afternoon from the resistance of 1.1740, where I recommended opening short positions, which caused the pound to fall to the area of this year's lows and to their renewal. Now the task of sellers is to hold the resistance of 1.1667, and the formation of a false breakout on it, in a place with weak fundamental data for the UK, will lead to another return of GBP/USD to the support area of 1.1563, and it is quite possible to the 6th test of the low of 1.1470. A break in this area will resume a strong bearish trend for the pound in order to update the round figures 1.1400 and 1.1300, where I recommend taking profits. In the scenario of growth above 1.1667 in the first half of the day, bears will count on sales from the resistance of 1.1778. If there is no volume after testing this area, it is best to postpone short positions until the high of 1.1911 is updated.

Signals of indicators:

Moving averages

Trading is carried out in the region of 30 and 50 moving average, which indicates the formation of the side channel and the likelihood of an upward correction of the pound.

Bollinger bands

In the event of a decline, support will be provided by the lower boundary of the indicator at 1.1440. Growth will be limited by the upper boundary of the indicator in the area of 1.1730.

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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 20. Euro is trying to bounce back from another low, while the Fed is increasing

To open long positions on EURUSD you need:

A test of the next major support levels, from which I recommended buying yesterday in anticipation of an upward correction, led to a slight strengthening of the euro against the US dollar today at the Asian session. An increase in Federal Reserve purchases of bonds and a sharp surge in unemployment benefits do not bode well for the future of the market. Currently, buyers will focus on resistance 1.0741, a break and consolidation above which on a 5-minute chart may lead to a continuation of the upward correction to the area of highs 1.0782 and 1.0822, where I recommend taking profit. If the bulls fail to break above 1.0741, it is best to postpone long positions until the support test 1.0697, subject to the formation of a false breakout there, or buy EUR/USD from this month's low in the 1.0653 area. If there is no activity on the part of the bulls in this range, large players will most likely retreat. In this case, it is best to return to long positions after the euro falls to the lows of 1.0607, 1.0572 and 1.0549.

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To open short positions on EUR USD you need:

Bears need to protect the resistance of 1.0741, where the formation of a false breakout will be another signal to open short positions in the expectation of a decline to the lows of 1.0697 and 1.0653. A breakout of these supports will quickly push EUR/USD to new levels of 1.0607 and 1.0572, where I recommend taking profits. Weak reports on inflation in Germany and the balance of the eurozone, which are expected today in the morning, will only worsen the situation of the euro. In case the pair grows above the resistance of 1.0741, it is best to return to short positions after a false breakout in the resistance area of 1.0782, where the moving average passes, or sell EUR/USD immediately to rebound from the highs of 1.0822 and 1.0860.

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

Growth will be limited to the upper level of the indicator around 1.0822. In case the euro falls, the lower boundary of the indicator in the area of 1.0607 will provide support.

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Description of indicators

  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
  • MACD indicator (Moving Average Convergence / Divergence - Moving Average Convergence / Divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
  • Bollinger Bands (Bollinger Bands). Period 20
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Overview of the GBP/USD pair. March 20. The Bank of England lowered its key rate to 0.1% at an emergency meeting

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: -125.7083

The British pound at the auction on Thursday, March 19, suspended the collapse of the downward movement and even began to adjust slightly. This is evidenced by the "whole" two purple bars of the Heiken Ashi indicator. This event for the pound at this time is as rare as a solar eclipse. However, jokes are jokes, but even this upward correction threatens to be extremely weak. The position of the bulls is not weak, they are simply absent. None of the speculators wants to buy the British pound since it is the British currency that looks the least promising of all the currencies of the "main basket". Thus, most likely, the downward movement will resume in the near future, as sad as it may sound for fans of the British pound.

Despite the fact that many countries around the world have already closed their borders, British foreign Secretary Dominic Raab said that the government does not yet plan to introduce a "full quarantine". However, this decision is in the position of "permanent review". "The advice of scientists is that this should not be done at the current stage. We are now very clear that it is not in the UK's interests to take these measures. Closing the borders will not affect the spread of the disease," Raab said. But British Prime Minister Boris Johnson believes that additional security measures will not prevent. "In light of recent events, we think we should strengthen measures to limit the growth of the epidemic by closing schools. Thus, I can state that after schools close on Friday, they will remain closed until further orders," the Prime Minister of the Kingdom said.

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The number of cases of "coronavirus" is currently 2,644. Officially, 67 cases of complete recovery and 104 deaths are reported. However, unfortunately, as in many other countries, the epidemic continues to spread and this is very bad. Both for the economy and for the people of Great Britain. Moreover, there are a certain number of infected people who simply do not know about it yet, because they do not have any symptoms and have not passed the test.

Meanwhile, the Central Bank of England at an emergency meeting decided to reduce the key rate from 0.25% to 0.1%. It is noteworthy that the previous decline was just a few days ago and amounted to as much as 50 basis points. In addition, the British regulator decided to expand the program of quantitative easing in the amount of 200 billion pounds through the purchase of government bonds and corporate bonds. According to the Regulator, which is already under the leadership of Andrew Bailey, the economic shock caused by the spread of the "coronavirus" should be short-lived. However, the Bank of England recognizes the gravity of the situation. "In recent days, conditions in the UK government bond market have worsened, as investors have sought shorter-term assets that are alternatives to highly liquid assets of the Central Bank," the Bank of England said in a statement. The new head of the Bank of England, Andrew Bailey, said that the Regulator is ready to pour any amount of money into the economy to mitigate the impact of the "coronavirus". The Central Bank creates a commercial financing fund that will buy commercial bills for up to 1 year, thus financing the business. This will apply to companies that make a significant contribution to the British economy.

From a technical point of view, the pair has now started an upward correction. However, as we have said above, it is unlikely to be long-lasting. In any case, in order not to guess, it is recommended to carefully monitor the Heiken Ashi indicator, which clearly shows local reversals. Both linear regression channels turned downwards. The moving is also directed there. Thus, all trend indicators signal a downward trend. No one knows how long the collapse of the pound will continue. As we can see, no actions of the Bank of England can stop the fall yet. "Coronavirus" remains a key factor for the economy of each particular country.

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The average volatility of the pound/dollar pair over the past 5 days is already 370 points and continues to grow. The last two trading days were absolutely record-breaking for the pound - exactly 1000 points were passed in total... For two days... With that in one direction. On Friday, March 20, we expect the pair to move within the volatility channel of 1.1155-1.1895. This pair is likely to return to the lower border, but there are also small hopes for a correction.

Nearest support levels:

S1 - 1.1475

S2 - 1.1230

Nearest resistance levels:

R1 - 1.1719

R2 - 1.1963

R3 - 1.2207

Trading recommendations:

The GBP/USD pair has started a long-awaited correction. Thus, sales of the pound with the targets of 1.1230 and 1.1155 are still relevant, but it is recommended to open new sell positions after the Heiken Ashi indicator turns down. It is recommended to buy the British pound with the target of 1.2451, but 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 20. In the States, the number of applications for unemployment benefits has increased

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - sideways.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - downward.

CCI: -189.2552

Well, another disastrous day for the European currency has ended. If the pound (this time!) showed at least some signs of the beginning of a corrective movement on March 19, then the euro currency, after a short pause, fell down again. The "draconian measures" of the European Central Bank, which announced a new "Pandemic Emergency Purchase Program" worth 750 billion euros by the end of 2020 and the fact that US stock markets continue to collapse did not help. Traders still persist in buying the US dollar, continuing to consider it the safest currency in times of crisis. And no one doubts that the next crisis has come. Now the main thing is to figure out when it will end and when the economy will begin to recover. However, according to the general opinion of both medical experts and economic experts, it is too early to talk about this. While the pandemic was stopped in China, it continues to spread in Europe and the United States.

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According to the latest data, the number of people infected with the COVID-2019 virus worldwide has reached 228,000 people. It is noteworthy that the growth of infected people has stopped not only in China but also in Italy. However, if the PRC has already declared a local victory over the virus, it is too early to draw the same conclusions for Italy. The Italian government is going to extend the strict quarantine and believe that even when the peak of the pandemic is overcome, it will not be possible to return to normal life immediately. "The government's measures, including suspending commercial activities and closing schools, will be extended as long as necessary," Italian Prime Minister Giuseppe Conte said. "The restrictions help to contain the spread of the coronavirus, Italy managed to avoid the collapse of the system," the Prime Minister said. As for other countries, in Spain, the number of infected reached 17,000, in Germany - 14,000, in France - 9,000.

The oil market is now extremely important for the whole world. Since it is not the least of all the source of panic in the stock and currency markets. Recall that oil of all brands fell to the lowest levels in the last 20 years on Wednesday. At the auction on Thursday, the quotes of "black gold" managed to recover a little, but this is not enough to talk about overcoming the crisis. It is obvious that the oil market collapsed due to the falling demand for oil due to the "coronavirus", as well as due to the failure of negotiations to stabilize oil prices between OPEC countries (in particular, Saudi Arabia) and Russia. On Thursday, the price of Brent and WTI crude oil rose to $ 25.9 and $ 23, respectively.

If the oil market shows any signs of recovery, the US stock market continues to collapse. All leading economists have no doubt that the world is on the verge of a new crisis, and the recession has already begun. At the opening of trading on Thursday, the key S&P 500 and Dow Jones Industrials indices fell again. The first by 0.35%, and the second by 0.19%. This is a tiny drop compared to the losses that the stock market has already suffered. However, the auction on March 19 has not yet been completed. As of now, both indices have lost more than 2%. At the same time, the US Senate continues to consider the proposal of Donald Trump and Treasury Secretary Steven Mnuchin to allocate $1 trillion to support the economy. This amount should go to help airlines, households, and ordinary citizens. At the same time, if in the case of business we are talking about cheap loans, then with ordinary citizens, most likely, the policy of "helicopter money" will be applied, which has already proved extremely well during the 2008 crisis. Approximately $1,000 will be allocated for each US citizen, but more precise amounts will depend on income and family size.

By the way, today's eye-catching report on the number of applications for unemployment benefits in the US for the week of March 13. If previously these reports almost never attracted attention, now the real number of applications was almost 281,000, with experts' forecasts of 220,000 and the previous value of 214,000. The impact of "coronavirus" on business (reduction of the number of jobs) and on employees (increase in unemployment) is also on the face.

Well, Donald Trump, who goes on the air almost every day, and his comments about the COVID-19 epidemic cause a great resonance among both economists and doctors, again wrote an "encouraging" post on Twitter. "We will win - sooner rather than later," Trump said. But the President of the European Central Bank, Christine Lagarde, said that the fight against the "coronavirus" could cost the European Union about 5% of economic growth. According to ECB estimates, the EU risks losing from 2% to 10%. Everything will now depend on how long the restrictions (quarantines) will be in effect. The ECB believes that in almost all countries they will be extended to three months. It is in this scenario that the European economy risks losing approximately 5%. The ECB also decided to allocate approximately 37 billion euros to the countries of the alliance to combat the consequences of the epidemic. It is expected that these funds will help to combat the lack of liquidity, as well as strengthen the medical sector.

On Friday, March 20, neither the European Union nor the United States is scheduled for any important macroeconomic publications. However, as we have repeatedly said, they are not needed now by market participants. Conservative traders can only wait for the daily collapses to pass in order to resume logical and reasonable trading. From a technical point of view, the downward movement continues, as evidenced by both the fastest indicator "Heiken Ashi" and the slower senior channel of linear regression. The CCI indicator is in the oversold zone, but it also does not have any effect on trading at the moment. When markets are in a panic, the best option is to stay out of the market. Or trade strictly on the trend.

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The average volatility of the euro/dollar currency pair remains at record values and continues to grow day by day. At the moment, the average value for the last 5 days is 225 points, and the last trading day turned out to be an absolute record – 326 points. Markets continue to be in an agitated state. There is no logic in the movement now, the markets just collapse and collapse every day. Thus, on Friday, we again expect a decrease in volatility and movement within the channel, limited to the levels of 1.0465 and 1.0915.

Nearest support levels:

S1 - 1.0620

S2 - 1.0498

Nearest resistance levels:

R1 - 1.0742

R2 - 1.0864

R3 - 1.0986

Trading recommendations:

The euro/dollar pair continues its strong downward movement. Thus, traders are still recommended to sell the euro with the targets of 1.0620 and 1.0498 before the Heiken Ashi indicator turns up, which will indicate the beginning of an upward correction. It will be possible to buy a pair of EUR/USD no earlier than fixing the price above the moving average line with the first target Murray level of "4/8"-1.1230. When opening any positions, increased caution is recommended, since a frank panic reigns in the market now.

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 GBP/USD on March 20, 2020

GBP/USD

The British pound completed an 8-day 16-figure(!) drop in the range of Fibonacci levels of 271.0-261.8%. Today, the pound is steadily correcting upwards; Fibonacci levels are the target growth targets: 223.6% (1.1750), 200.0% (1.1935). The Marlin oscillator leaves the oversold zone. But this strength and speed of the oscillator's turn also speaks of its ultrafast discharge, which later can help the indicator return to the downward movement just as quickly. We are waiting for the British pound to fall after the correction is completed.

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The Marlin formed a fast (and probably weak) convergence on the four-hour chart. We are not yet considering a price increase above the Fibonacci level of 200.0%, since the MACD line is moving towards it, and when meeting with it, it will significantly increase resistance.

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

Forecast for AUD/USD on March 20, 2020

AUD/USD

The Australian dollar noted the support of the closest embedded line of the downward price channel of the higher timeframe and sharply turned up on Thursday, blocking a 280-point decline within the day. The reason for the initial strong decline was an emergency lowering of the RBA rate from 0.50% to 0.25%, but the market got tired of falling by 11 figures in the last nine days and made a technical correction. The highest correction is seen at the level of 50% of the entire 9-day fall, at the 0.6100 level. The correction may be completed in the region of 38.2%, that is, near yesterday's peak. After the correction is complete, we expect the Australian dollar to decline to the new target of 0.5395 - to the high of August 2001.

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On the four-hour chart, the signal line of the Marlin oscillator quickly went from being oversold into growth territory – to the zone of positive values. This is a good signal for a further correction to develop, that is, it is more likely to be deeper, so we are focusing on 0.6100.

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

Forecast for USD/JPY on March 20, 2020

USD/JPY

It is a public holiday in Japan today, Japanese markets are closed and the yen receives only indirect support from the Bank of Japan. As a result, the USD/JPY pair is declining despite the growth of Asian stock indices. The signal line of the Marlin oscillator is slightly turning down, which may mean the completion of upward correction from current levels and the price channel line at 111.98 may not be reached.

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The Marlin does not form a strong divergence on the four-hour chart, which can also be a sign of the completion of corrective growth. Finally, a reversal will form after the price goes below the MACD line on the daily chart (109.12), which will show the falsity of yesterday's price exit above this line. After that, we expect the price to support the embedded line of the price channel in the region of 107.10 and then fall to the lower line in the region of 102.80....

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

Comprehensive analysis of movement options of #USDX vs EUR/GBP vs GBP/JPY vs EUR/JPY (DAILY) on March 20, 2020

It's time to pay attention to the "health" of cross-instruments. Here's the comprehensive analysis of movement options of #USDX vs EUR/GBP vs GBP/JPY vs EUR/JPY (DAILY) on March 20, 2020.

Minor operational scale (daily time frame)

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US dollar index

The movement of the #USDX index from March 20, 2020 will continue depending on the direction of the breakdown of the range :

  • resistance level of 102.10 - control line UTL of the Minuette operational scale forks;
  • support level of 101.60 - the ultimate Shiff Line of the Minor operational scale forks.

In case of breakdown of the final Schiff Line (support level of 101.60) of the Minor operational scale pitchfork, the development of the dollar index movement can be directed to the equilibrium zone (100.90 - 99.80 - 98.70) of the Minor operational scale forks.

On the other hand, in the event of a breakdown of the control line UTL (resistance level of 102.10) of the Minuette operational scale forks, the upward movement #USDX will be directed to the warning line UWL100.0 (103.20) of the Minuette operational scale forks with the prospect of reaching the final line FSL (106.80) of the Minor operational scale forks.

The markup of the #USDX movement options on March 20, 2020 is shown on the animated chart.

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Euro vs Great Britain pound

The movement of the cross-instrument EUR / GBP cross on March 20, 2020 will depend on the development and direction of the breakdown of the range :

  • resistance level of 0.9498 - control line UTL of the Minuette operational scale forks;
  • support level of 0.9335 - warning line UWL61.8 of the Minor operational scale forks.

The breakdown of the warning line UWL61.8 (support level of 0.9335) of the Minor operational scale forks will lead to the option for the development of the movement of this cross-instrument to the boundaries of the 1/2 Median Line channel (0.9270 - 0.9130 - 0.9105) of the Minor operational scale forks and the equilibrium zone (0.9000 - 0.8840 - 0.8680) of the Minuette operational scale forks.

Alternatively, in case of sequential breakdown of the resistance level of 0.9498 (control line UWL of the Minuette operational scale forks) and control line UWL (0.9540)of the Minor operational scale forks, then the upward movement EUR / GBP can be continued to the warning lines - UWL38.2 (0.9730) and UWL61.8 (0.9870) of the Minuette operational scale forks.

The details of the EUR / GBP movement options from March 20, 2020 are shown on the animated chart.

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Great Britain pound vs Japanese yen

The development of the GBP / JPY cross-instrument movement from March 20, 2020 will depend on the development of the boundaries of the equilibrium zone (125.35 - 128.55 - 131.45) of the Minor operational scale forks. The markup for developing these levels is presented on the animated chart.

In case of breakdown of the upper boundary ISL38.2 (resistance level of 131.45) of the equilibrium zone of the Minor operational scale forks, the development of the GBP / JPY movement will continue to the boundaries of the 1/2 Median Line Minor channel (134.15 - 136.85 - 139.30).

On the other hand, the return of the cross-instrument below the support level of 125.35 (the lower boundary of the ISL38.2 equilibrium zone of the Minor operational scale forks) will make it possible to continue the development of the downward movement to the reaction line RL100.0 (117.45) and the final line FSL (114.10) of the Minor operational scale forks.

The details of the GBP / JPY movement on March 20, 2020 can be seen on the animated chart.

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Euro vs Japanese yen

The further development of the movement of the EUR / JPY cross-instrument from March 20, 202 will be determined by developing the level of 118.75 at the intersection of the lower boundary of the ISL38.2 equilibrium zone of the Minuette operational scale forks and the upper boundary of the a Median Line channel of the Minor operational scale forks.

The movement of EUR / JPY above the level of 18.75 will develop in the equilibrium zone (118.75 - 119.60 - 120.40) of the Minuette operational scale forks with the prospect of reaching the final Schiff Line Minuette (120.90) and the lower boundary of ISL38.2 (122.30) equilibrium zone of the Minuette operational scale forks.

On the contrary, the movement of EUR / JPY below the level of 118.75 will continue to develop in the 1/2 Median Line channel (118.75 - 117.35 - 116.13) of the Minor operational scale forks with the prospect of reaching the LWL control line (115.65) of the Minuette operational scale forks.

We look at the details of the USD / JPY movement from March 20, 2020 on the animated chart.

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

The formula for calculating the dollar index :

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

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

Euro - 57.6% ;

Yen - 13.6% ;

Pound Sterling - 11.9% ;

Canadian dollar - 9.1%;

Swedish krona - 4.2%;

Swiss franc - 3.6%.

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

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

EUR/USD. Panic, and nothing but panic: buzz around the dollar pulls the pair to the bottom of the 6th figure

The euro-dollar pair again updated the price lows today: if yesterday the bears were able to reach only the bottom of the eighth figure, today they marked the low at 1.0695 (at the time of writing). Given the ongoing excitement around the US currency, the market began to discuss the probability of achieving parity – not only in euro pairs, but also in pairs with the pound, which fell by one and a half thousand points in a week and a half. The foreign exchange market still favors the dollar, despite positive news from China, where no new cases of coronavirus infection were detected at the local level over the past day. The infection has not completely left China – but now it is only "exported" from outside: all identified patients were infected outside the country.

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Many have called this fact a "turning point." Indeed, the authorities of a huge state managed to cope with the epidemic in a rather short period of time, while the total number of cases (about 90 thousand) looks scanty against the background of a half billion people. Most experts expected that 70-80% of the citizens of China would be affected by the coronavirus, but Beijing was able to curb COVID-19 with relatively small losses, especially given previous forecasts. China is gradually returning to a normal life, weakening rather strict quarantine measures.

Today's news from China halted the fall of EUR/USD. But not for long. The bulls of the pair were able to develop the correction until the middle of the 9th figure, but the sellers again seized the initiative at the end of the European session and with renewed vigor pulled down the single currency to the bottom. Traders, apparently, decided - the Chinese example, of course, is worthy of praise, but the rest of the world is not doing so well.

The number of cases of the disease continues to grow – at the moment, this figure exceeds 214 thousand people. The European Union, Turkey, Israel, and the United States have closed their borders – and this is not a complete list of countries with the "iron curtain". In many EU countries (in particular, in Italy, Spain, and Croatia), restrictive measures were significantly tightened, closing all entertainment centers, bars and restaurants, and schools. In some countries, only grocery stores, pharmacies, and gas stations are open. The British authorities also "woke up", where Covid-19 has already killed more than a hundred people. London was the last to introduce restrictive measures. But more than 40 metro stations will be closed in London today, all restaurants, clubs and catering outlets will be closed at the weekend, and schools will be quarantined from Monday. The situation is similar in Latin America – for example, Peru has even imposed a curfew. Moreover, in Brazil, in the wake of the spread of the coronavirus, protest movements against President Bolsonaro began. According to many residents, the authorities have long ignored the threat, as a result of which the number of cases has already exceeded half a thousand – and restrictive measures have not yet been introduced.

In other words, the situation is spinning in an upward spiral, so "Chinese optimism" had little impact on the overall mood of traders. Central banks of the world's leading countries continue to spend huge amounts on providing liquidity, but the availability of dollar financing remains tight. Yesterday, the European Central Bank announced an asset purchase program worth 750 billion euros, today the Bank of England at an emergency meeting again lowered the rate (to 0.1%) and increased QE by 200 billion pounds. In response to this move, the GBP/USD pair moved away from 35-year lows (for how long?).

But in general, the latest actions of central banks could not change the general mood of traders: the war for the dollar is still not subsiding – market participants are dumping other assets to invest in a safe greenback, provoking an unprecedented hype around the US currency. Actually, thanks to this fundamental factor, dollar pairs are setting records in recent days. All other circumstances are only auxiliary.

The whole problem is that the real scale of the consequences of the coronavirus COVID-19 for the global economy is still impossible to assess. Such uncertainty puts enormous pressure on investors who, in the current circumstances, recognize only one life buoy - the dollar. Treasury bonds, other government bonds, and even the traditional defensive instruments in the foreign exchange market, such as the Japanese yen and gold, fell under a wave of sales.

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There is no consensus on the market as to how long the US hegemony will last. Dollar bulls ignore the dovish decisions of the Federal Reserve, while government support programs from the US authorities only strengthen the greenback. Recently, the Lower House of Congress has already approved a package of measures to assist citizens of the country. After that, the senators, together with the Trump administration, began to discuss the third package of economic assistance. All these steps of Washington only cement the privileged position of the dollar in relation to other currencies.

Summarizing the above, it can be assumed that dollar bulls will continue to feel comfortable in all pairs - including paired with the euro. As long as the news flow regarding the distribution of Covid-19 is negative, the US currency will skim the cream. In the context of the euro-dollar pair, this means that in the short term, bears can reach the bottom of the sixth figure, sweeping away all technical barriers in its path.

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