EUR/USD Targeting New Highs!

EUR/USD is trading at the 1.0905 level and it seems determined to climb way higher after the breakout above the near-term resistance levels. I talked in my previous analysis that the pair could reverse on the short term if the US Dollar Index drops below the 101.08 static support.

The USDX is trading at 100.85 level, but it could come back to test and retest the broken 101.08 level before it resumes the corrective phase. So, a USDX's further drop will force the EUR/USD to increase. Once again, the EUR/USD pair increases only because the Dollar is into a correction and not because the EUR is strong these days. The USD has rallied also because it is used as a safe-haven amid this COVID-19 epidemic. It remains to see what will happen with the USD if the United States economy suffers as a result of the coronavirus pandemic, EUR/USD maintains a bearish outlook, despite the current rebound.

analytics5e7c534c8d76c.jpg

The pair has managed to jump above the Pivot Point (1.0857) level and above the inside sliding line (SL) of the orange ascending pitchfork signaling a further increase towards the 61.8% retracement level.

EUR/USD has broken the upper median line (uml), it has retested it and now is targeting new highs as the USDX retreats on the short term. I said yesterday that a reversal could be confirmed only if the price makes a valid breakout above the sliding parallel line (SL).

So, if the price registers an upside breakout from the ascending channel between the LML and the SL, EUR/USD should approach the 61.8% level and the weekly R1 (1.1077) level.

  • TRADING TIPS

EUR/USD has increased on the short term within the minor up channel, but a valid breakout above the sliding line (SL) will confirm a quick and significant increase. The major upside targets are seen at 1.1200 - 1.1215 and at the median line (ML).

The pair will maintain a bullish bias on the short term as long it is traded above the lower median line (LML) of the major ascending pitchfork. A false breakout with a great separation above the sliding line (SL) will send the rate down again towards the 100% level and the LML.

Personally, I'm still expecting a further increase after the runaway from the lower median line (LML), the up channel's support, you can notice that the price has failed to come back to retest the dynamic support in the previous days.

Another selling opportunity may appear if the pair registers a valid breakdown below the lower median line (LML) of the orange pitchfork.

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

Trading plan for EUR/USD on March 26, 2020

analytics5e7c4bff0613a.jpg

There is positive news in Italy: the increase of coronavirus cases in the country has decreased from 10% per day to 7% per day.

However, there is a big negative: the number of infected people in the US has increased from 54,000 to 69,000, or almost 30% per day.

By March 27, the United States will likely become the country with the largest number of coronavirus infections in the world (not counting China, where almost everyone has already recovered, except for the dead).

Other countries:

Spain - 49,500

Germany - 41,200

France - below 26,000

Britain - 25,200

US has passed the $ 2 trillion aid package for the economy.

The US unemployment report will be released at 13:30 London time.

EUR/USD: the pair's situation is unclear.

Sell at a break down of 1.0635.

Possible sale from 1.0940.

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

Indicator analysis. Daily review of GBP/USD on March 26, 2020

The pair continued to move upward on Wednesday, almost reaching the historical resistance level of 1.1937 (blue dotted line). Today, the upward pullback may continue. Strong calendar news for the pound is expected at 07:00 and 12:00 UTC, and for the dollar at 12:30 UTC.

Trend analysis (Fig. 1).

Today, from the level of 1.1893 (closing of yesterday's candle) the pair may roll back downward and test the retracement level of 38.2% - 1.1760 (blue dashed line) before it starts to move up upon the news on 07:00 UTC. Upon reaching this line, the continuation of the upward movement is possible with the target of 1.2096, a retracement level of 38.2% (red dotted line).

analytics5e7c4ac450099.jpg

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, an upward rollback is possible.

Unlikely scenario: from a retracement level of 38.2% - 1.1760 (blue dashed line) work down with a target of 1.1693, a retracement level of 50.0% (blue dashed line).

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

Indicator analysis. Daily review of EUR/USD on March 26, 2020

Trend analysis (Fig. 1).

Today, from the level of 1.0882 (closing of yesterday's candle) the price will attempt to continue to move up with the target of 1.0965, a retracement level of 38.2% (red dashed line). If this level is reached, the downward movement will continue with the target of 1.0889, a retracement level of 23.6% (Blue dashed line).

analytics5e7c452b7faf9.jpg

Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - up;

- Fibonacci levels - up;

- Volumes - up;

- Candlestick analysis - down;

- Trend analysis - up;

- Bollinger Lines - up;

- Weekly schedule - up.

General conclusion:

Today, the price will try to continue to move up.

An unlikely scenario: from a pullback level of 38.2% - 1.0965 (red dashed line), work down, with a target of 1.0802, a pullback level of 50% (blue dashed line).

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

Trading plan for EUR/USD and GBP/USD on 03/26/2020

The markets continue to behave inappropriately, which, of course, is a logical result of the ongoing panic. Nevertheless, periodically, there are signs that the market is trying to return to at least some semblance of normality but in places. For example, the growth of the pound in the first half of the day was largely due to just fundamental reasons. Whereas the growth of the single European currency lasting all day was caused solely by panic due to the coronavirus. Indeed, the number of people infected in the United States was 14,125 in 24 hours. When you see such terrifying numbers, you involuntarily think that the situation with the coronavirus in the United States may turn out to be worse than in Italy. This terribly scares and provokes a number of investors to withdraw part of the funds somewhere further away from North America. However, the oddity is that the pound was losing ground in the afternoon amid extremely good statistics in the United States while the single European currency continued to grow. As if there is no coronavirus for the pound, but there are only macroeconomic statistics, whereas there is only a coronavirus for a single European currency. So, yes, the markets have not yet returned to normal, and they continue to be in a feverish, which is accompanied by not quite adequate behavior.

analytics5e7c4d639cb67.jpg

So, initially, the pound largely grew due to data on inflation, which fell from 1.8% to 1.7%. At first glance, this seems strange. However, it should be taken into account that a decrease of up to 1.5% was predicted. In addition, the pound is still noticeably oversold, and any news, at least with some hint of a positive character, contributes to its growth. This is true only if the market is in a normal state, and not in a panic mode.

Inflation (UK):

analytics5e7c4d73162d3.jpg

And the fact that the market is still panicking is clearly demonstrated by the single European currency, which could really grow only due to news about the pace of distribution of coronavirus in the United States. After all, the statistics in Europe were pretty disappointing. For example, IFO data showed a marked decrease in indices in Germany. Thus, the business climate index fell from 96.0 to 86.1. Meanwhile, the index of economic expectations literally collapsed from 93.1 to 79.7, while the index of current economic conditions decreased from 99.0 to 93.0. And it is clear that all indicators turned out to be worse than forecasts. The data itself is in the logic of recent business activity indexes, which simply collapsed. So the situation in the European economy, to put it mildly, causes slight concern. Nevertheless, there was some positive news in Europe. For instance, in France, the number of applications for unemployment benefits fell by as much as 31 thousand. And they expected a decrease of 16 thousand. Moreover, the number of applications for unemployment benefits in the Fourth Republic has been declining for the fourth month in a row. But, the data is only for February, and in March everything can change dramatically. However, Spain reported a slowdown in the growth of production orders from 3.1% to 1.7%. So the industry in Europe continues to be not in the best condition. Rather, there are signs of further deterioration.

Applications for unemployment benefits (France):

analytics5e7c4d8206b5d.jpg

The US statistics turned out, frankly, very, very good. But this only affected the pound, then the single European currency continued to grow. So, the volume of orders for durable goods has not decreased by 0.7%, but increased by 1.2%. Moreover, the previous results were revised for the better, and in January, there was an increase of 0.1% instead of a decline of 0.2%. Consequently, orders for durable goods have been growing for three consecutive months. In addition, housing prices in the United States rose 0.3%, while they forecast growth of 0.2%. Thus, the decline in the pound is quite logical, but the growth of the single European currency rather suggests that the market has not yet returned to normal. Moreover, what is happening in the debt market is more likely to indicate that the first signs of the end of the process of mass exodus of capital from around the world to the United States are appearing. The fact is that if the yield on 5-year bonds decreased from 1.150% to 0.535%, that is, demand continues to be rushed, then the situation with 2-year bonds is different. Their profitability increased from 0.16% to 0.22%. Of course, it is too early to draw conclusions and say that the trend is changing. But the first signs appear that a reversal could really happen soon. Here, it is necessary to closely monitor the situation in the debt market.

Durable Goods Orders (United States):

analytics5e7c4d94113b3.jpg

Today, data on retail sales will be published in the UK, the growth rate of which may accelerate from 0.8% to 0.9%. And if we can recall yesterday, the pound responded adequately to macroeconomic statistics, then we can expect the pound to grow. At the same time, the meeting of the Board of the Bank of England today is clearly not interesting to anyone, since all decisions were taken during an emergency meeting. It is surprising that, following the example of the Federal Reserve System, this very meeting was not canceled at all.

Retail Sales (UK):

analytics5e7c4da1be51b.jpg

Here, the American statistics can literally blow up the market, and we will see a rapid rise in both the pound and the single European currency. Today, data on applications for unemployment benefits will be published. Data on initial applications should show the situation on March 21, that is, after the introduction of restrictive measures designed to curb the spread of coronavirus. These measures themselves consist in the fact that many people are transferred to remote work from home, and also restrict the work of various institutions where large groups of people can gather. So, judging by the forecasts, neither the United States Department of Labor, nor research institutes or analytical agencies have any illusions about American employers. It is expected that the number of initial applications for unemployment benefits will increase from 281 thousand to 1,090 thousand. Yes, you were not mistaken, we are talking about a figure of over a million. And this is in relation to initial applications. This number has never been. This will be another record set thanks to the coronavirus. And it is clear that against this background, no one will care at all about the number of repeated applications for unemployment benefits, which should increase from 1,701 thousand to 1,820 thousand. In addition, the final data on GDP for the fourth quarter are of little concern. Everyone already knows that the pace of economic growth accelerated from 2.1% to 2.3%. But this was after all at the end of last year, when there was still no coronavirus.

Number of Initial Jobless Claims (United States):

analytics5e7c4dafe906b.jpg

During the correctional movement, the euro / dollar currency pair managed to break through the maximum of the beginning of the week 1.0888, focusing in the region of 1.0900. It is likely to assume a fluctuation within 1.0880 / 1.0950, where in case of price fixing higher than 1.0950, a path will open for us in the direction of 1.1000-1.1030.

analytics5e7c4dbe8494a.jpg

The pound/dollar currency pair is locally moving closer to the psychological level of 1.2000, where it felt a periodic ceiling above itself and, as a fact, rolled back towards 1.1660 with subsequent accumulation in the level of 1.1850. It is likely to assume that the quote will continue to show upward interest, where in case of price fixing higher than 1.1915, the path will open for us in the direction of the level of 1.1970-1.2000.

analytics5e7c4dcdd9072.jpg

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

Hot forecast for GBP/USD on 03/26/2020 and trading recommendation

It is not strange, but the pound's behavior indicates that the market is trying to return to normality and behave appropriately to reality. In general, this is not surprising, since markets cannot remain in chaos for a long time. Sooner or later, panic moods give way to the realization that you can run as much as you like, but you also need to earn money. But panic in the markets is nothing more than an escape from risk. And the flight to nowhere. That is, of course, they saved the money, but what's next. Money cannot just lie. They should work. Surprisingly, return on investment is possible only in conditions of stability in the market, as well as the growth of stock indices. And for this it is necessary that markets adequately respond to what is happening around.

analytics5e7c572e1d0e7.jpg

So, the pound has been growing since yesterday. More precisely, it continued to grow. It did not even bother when it saw a fall in UK inflation from 1.8% to 1.7%. Here the trick is that they predicted a decrease in inflation to 1.5%, and it was precisely this development of events that was laid. But it turned out that inflation slowed down much more significantly. And in the current situation, this is quite an objective reason for the growth of the pound. Indeed, it fell so much over the previous week that it still remains seriously oversold.

Inflation (UK):

analytics5e7c5740be69c.jpg

The dollar grew at the beginning of the US session. Here again, everything is quite logical, since US macroeconomic statistics turned out to be not only better than forecasts, but significantly better. In particular, the volume of orders for durable goods did not decrease by 0.7%, but grew by 1.2%. At the same time, the previous results were revised from -0.2% to 0.1%. The difference is huge. After all, it turns out that the volume of orders has been growing for the third month in a row. In addition to this, housing prices rose 0.3%, instead of the projected 0.2%. Thus, there is a significant increase in orders in the United States, and a moderate increase in housing prices. Another thing is that the dollar's growth was not so significant, and did not overlap the pound's previous growth. This is due to the continued oversold pound.

Durable Goods Orders (United States):

analytics5e7c576c69a48.jpg

Since the opening of the European session, we may see a kind of repeat of yesterday, as the growth rate of retail sales in the UK should accelerate from 0.8% to 0.9%. Another thing is that this data is for February, not March, when the United Kingdom began to introduce emergency measures to counter the spread of the coronavirus. So the reaction will be moderate in many respects. However, the pound should resume growth.

Retail sales (UK):

analytics5e7c577dc7ce6.jpg

But the market can literally go crazy as soon as the US session opens, and even earlier than that. The fact is that the number of initial applications for unemployment benefits should grow from 281 thousand to 1,090 thousand.This is just some fantastic growth. This has never happened before. Perhaps this is only for the simple reason that instead of transferring their employees to work from home, or sending them on vacation, US employers simply dismissed people. We are talking about small businesses, of course. That is, there is a prospect that the labor market will simply collapse. And against this background, the growth in the number of repeated applications for unemployment benefits, from 1,701 thousand to 1,820 thousand, looks somehow frivolous. It is unlikely that this data can even raise the negative reaction. No one will pay any attention to them at all.

Number of initial applications for unemployment benefits (United States):

analytics5e7c57a6ca73e.jpg

In terms of technical analysis, we see a local convergence with the psychological level of 1.2000, where the quote felt immense pressure, and as a fact turned around, forming a rebound towards the level of 1.1660. In fact, this phenomenon in itself was temporary, since with the arrival of Americans on the market, the picture changed, returning the quote to 1.1850, that is, the recovery is more than half.

Looking at the trading chart in general terms, we see a corrective movement from record lows, where the quote locally managed to return to the area before the pound's collapse.

We can assume that we are currently waiting for turbulence within 1.1815/1.1915, where if the price is consolidated higher than 1.1915, another attempt to build an upward move towards 1.2000 is not excluded.

Concretizing all of the above into trading signals:

- We consider long positions if the price is consolidated above 1.1915, where the first consolidation point is located at the previous day's high of 1.1972. The next move will depend on how fast the price will be able to overcome the 1.1972 mark , since the main prospect is in 1.2000/1.2050.

- Short positions, we consider as alternative positions in case of price taking below 1.1815, with the prospect of a move to 1.1775.

analytics5e7c57b84c4eb.jpg

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

EUR/USD. Coronavirus is no longer an ally of the dollar: United States actively catching up with Italy

The dollar index continues to fall – if the trends of the previous days continue, the indicator will leave the area of hundredth figures today and return to the previous positions where it was before the dollar fever. It is noteworthy that the US currency ignores the fundamental factors of a positive nature – this indicates the possible vulnerability of the greenback in the medium term.

For example, during the Asian session, it became known that the US Senate unanimously voted for a bill on emergency measures to support the country's economy in connection with the spread of coronavirus. We are talking about allocating two trillion dollars. And although this bill has yet to be approved by the lower house of the US Congress, it can already be considered adopted, since it was agreed by both Republicans, Democrats and representatives of the White House.

The final version of this document involves financing many sectors of the economy (primarily those affected by the pandemic) and supporting cities and states – worth $500 billion. In addition, a program to support small businesses will be developed ($367 billion has been allocated for this purpose) and the unemployment insurance program will be expanded (by $250 billion). Also, citizens of the country with an annual income of up to 75,000 will be paid $1200 (additional compensation is provided for children - $500). Well, in fact, the Senate allocated $46 billion to fight the epidemic as part of this bill.

analytics5e7c51f2ced60.jpg

Despite such significant monetary injections, the dollar remained aloof from this issue and virtually ignored the decision of the Senate. The positive outcome of the vote was not a surprise for dollar bulls, while other fundamental factors put background pressure on the greenback. For example, recent economic forecasts from major banks paint a rather bleak outlook. According to experts, if the quarantine measures are extended, the US economy will decline by 12-24%. At the beginning of the week, US President Donald Trump suggested that the White House will be able to lift the restrictions in early April, since the quarantine significantly slows the economy. At the same time, he assured that such a step will be reasoned and justified, primarily from the point of view of the epidemiological situation in the country.

But the latest figures suggest that the quarantine is unlikely to be lifted at the beginning of next month. Even with the current restrictive measures, the rate of Covid-19 distribution in the United States is only increasing. For example, the number of victims of coronavirus in the United States has exceeded one thousand people. According to the latest data, a total of 68,572 cases of infection and 1,031 deaths were recorded there. At the same time, only 593 people recovered. The sad situation itself is found in New York. Also, the centers of the epidemic are recorded in New Jersey, Washington and California. In other words, in terms of the number of cases, the United States is close to Italy, where more than 74,000 cases of infection are now known. These trends have already become a matter of concern in the WHO – the organization said that the United States may become the new epicenter of the spread of the coronavirus.

It is difficult to imagine that Trump will decide to lift the quarantine amid such dynamics, especially since, according to all forecasts, the peak of the epidemic in the United States is still ahead. American doctors and scientists oppose this idea of the White House, warning of catastrophic consequences.

The dynamics of the dollar index in general and the EUR/USD pair in particular is due only to this circumstance. The excitement around the greenback has significantly decreased following the Federal Reserve's latest decisions, and now traders can assess further risks in relatively calm conditions. Figuratively speaking, every new case of coronavirus in the US now serves as an "anchor" for the US currency – if the restrictive measures are not lifted in early April, then most likely the most negative scenarios for the country's economy will become a reality. In particular, according to Bank of America experts, in this case, in the second quarter, America will see the largest quarterly decline in GDP for the entire post-war period at 12%. According to their estimates, the gross domestic product grew by only 0.5% in the first quarter. Some other major banks (in particular, Goldman Sachs) voiced more gloomy expectations.

Fed representative James Bullard added to the pessimistic picture. He said that the epidemic will hit the US labor market hard – according to his estimates, more than 45 million Americans may lose their jobs, and the unemployment rate will jump to a record 30%. He was also skeptical of the White House's proposed stimulus package – according to him, the state program will bring only "temporary relief", but no more. At the same time, he did not rule out the use of additional measures by the Fed.

analytics5e7c520617e45.jpg

Thus, the fundamental picture for the dollar, and, accordingly, for the euro-dollar pair, has changed significantly – not in favor of the US currency. This allows the EUR/USD bulls to not only gain a foothold in the ninth figure, but also test the nearest support levels – 1.0930 and 1.1010 (the lower and upper boundary of the Kumo cloud on the daily chart, respectively). For the pair's bulls, it is extremely important to enter the tenth figure – this will attract more buyers to their ranks, thus turning the situation for the pair.

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

Prospects for gold against COVID-19

The epidemic of the coronavirus COVID-19 is rapidly destroying the global economy, central banks and governments of various countries are taking emergency measures in an attempt to save what is left of it. The global margin market has led to a collapse in the value of assets around the world. Unfortunately, it was not possible to avoid negative consequences for gold, which experienced a rapid rise during March, then a fall, and then rose again and at the time of writing these lines are quoted at around $ 1,600 per troy ounce. So why did gold fall and what are its prospects? Let's try to figure it out.

Speaking about the prospects of gold or any other asset, we need to understand the approximate time horizon of our transaction or investment, otherwise we may encounter a situation where the asset will decline in price in one time span and grow in another. Increased volatility increases the uncertainty of trends, but the market is a market, and before moving on to considering short-term positions, we will analyze the investment prospects of gold and identify the reasons for the price decline that we observed in mid-March.

analytics5e7bbafeddc31.jpg

In anticipation of the crisis of the last decade, gold also experienced several periods of rather substantial decline. So, for example, the price of gold formed three cycles of decline in March-May, in July-September and October-November 2008, as a result of which it declined from $ 1000 to $ 700, and only then did the gold begin a cycle of increase, which ended with an increase to around $ 1900 in 2011 (Fig. 1).

analytics5e7bba8c2986c.jpg

Figure 1: Behavior of the price of gold in anticipation of the 2008-2009 crisis

The price reduction was due to the quantitative contraction policy pursued by the US Federal Reserve before the onset of the severe phase of the financial crisis caused by the bubble of mortgage construction in the United States. The Central Bank withdrew liquidity from the market, which led to the need to replenish the lack of margin or liquidate the position even with lower asset prices. As a consequence, such a policy was recognized as invalid, but this time, the Fed increased liquidity in the markets in advance; however, it was clearly not enough under conditions when stock markets grew for ten years, powered by quantitative easing programs conducted by central banks around the world.

Traditionally, gold is a safe haven asset, but in periods of severe squeezing of liquidity, traders are forced to exit assets, including gold. This would seem to reduce its protective functions, but even in this case, gold remains an excellent stabilizer of market risks. For example, the price of gold in yen declined by 1.5%, while the price of Japanese stocks dropped by 29%. On the other hand, the price of gold in euros rose by 2.2%, while European indices fell by 36%.

The liquidity crisis in euro, yen and dollars led to the currency market dropping up and down, and dropping the price of gold along with it, which exceeded again $ 1,600 per troy ounce by March 25. If we consider the short-term prospects of the precious metal at the hourly time, they look like this: gold consolidates at the top of its growth impulse from March 20-24, after which it will most likely continue to move upwards to the zone of $ 1650. At the same time, there is a high probability of one or more false breakdowns down to the $ 1580 zone, with the goal of buying at lower prices, the so-called liquidity seizure (Fig. 2).

analytics5e7bbac3be043.jpg

Fig. 2: Forecast of the movement of the price of gold on an hourly basis.

Traders need to take into consideration the fact that the hourly time determines the dynamics of the price for the future to one, a maximum of two weeks, and also take into account the high level of volatility in the global financial markets, which puts forward additional requirements for money management, in other words, it is easier for traders to reduce the size open positions.

Long-term gold prospects are more defined than short-term ones. After the central banks of the developed capitalist countries switched to direct monetization of the debts of governments and citizens, and financial institutions faced a massive injection of liquidity, gold has good growth prospects in all currencies. In addition, investment demand for gold remains high despite the short-term decline in demand from the jewelry industry in the United States, China and India. Since the beginning of 2020, investment flows have remained positive despite the global margin market. At the beginning of the year, the total investment flow increased by 7.72%, increased by $ 11.5 billion and amounted to 202 tons. In total, exchange trading funds contain gold worth $ 149 billion.

The effectiveness of gold lies in its unique properties of both a consumer product and an investment asset, which are closely related to factors affecting its value: economic expansion, risk and uncertainty, opportunity cost and positioning of traders on various exchanges, primarily in the United States.

In fact, amid the unprecedented economic incentive measures, the effect of which can acquire the properties of hyperinflation, the fall of traditional sectors of the economy, gold can become new in the shortest possible time - the old equivalent of value instead of rapidly depreciating fiat money.

From the latest news, CME Chicago has launched a new gold futures contract with an expanded, flexible supply in 100-ounce, 400-ounce or 1-kilogram bars. It is expected that the new contract will be launched with its first validity in April 2020, pending approval by the regulator.

"This time of unprecedented market conditions has led to growing demand for a wider range of supply needs for our customers around the world," "Offering a choice of supply sizes as well as cross-product spreads with our gold benchmark futures, this new contract will provide customers with maximum flexibility in managing physical supplies." said Derek Sammann, Senior Managing Director and Global Head of Commodity and Options Products, CME Group.

It may take some time to stabilize financial markets since no one knows how long the COVID-19 coronavirus epidemic will last, or how deep the decline in the economy and consumer demand may be. Moreover, the growing budget deficit, negative interest rates and falling GDP of all countries without exception can create and are already creating structural problems for asset managers, pension funds and personal savings of citizens. In conditions of rapidly growing uncertainty, gold remains the only asset over which time has no power, and the only material value at all times. Take care of yourself and always be careful. May this coronavirus already passed.

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

GBP/USD: plan for the European session on March 26. Buyers and sellers continue to measure forces. Bulls are counting on

To open long positions on GBP/USD you need:

Buyers yesterday managed to regain the resistance 1.1798, thanks to purchases from support 1.1635, from which I advised you to open long positions immediately on the rebound. This is clearly visible on the 5-minute chart. At the moment, their task in the first half of the day will be to defend, now support 1.1798, and the formation of a false breakout there will lead to a repeated wave of GBP/USD growth in the area of highs 1.1926 and 1.2023, where I recommend taking profits. The resistance update of 1.2023 will also lead to a test of the upper boundary of the upward channel, which will allow us to maintain a bullish trend in the pair. However, it is not worth counting on a protracted upward scenario. Today, the Bank of England will publish a decision on interest rates and possibly announce new measures to help the economy, which could put pressure on the British pound. In case the pair falls to the 1.1798 level, it is best to open new long positions when the pound returns to support 1.1635, as it was yesterday, or buy immediately to rebound from the year's low of 1.1470.

analytics5e7c4e656950d.jpg

To open short positions on GBP/USD you need:

Bears need to concentrate on regaining 1.1798 support, as only this will raise the pressure on the pair and lead to a fall to the low of 1.1635, where buyers actively announced themselves yesterday. However, it will be more bold to talk about the resumption of the bearish trend only after a breakout of this range, which will lead to the demolition of a number of stop orders of buyers and a more rapid decrease in GBP/USD to the low of 1.1470, where I recommend taking profits. The bears will also focus on the formation of a false breakdown in the resistance area of 1.1926, which will be a clear signal for opening short positions expecting that the pair will resume to fall along the trend that has been formed since the beginning of March. With the GBP/USD growth scenario above resistance 1.1926, it is best to return to short positions on the test of a high of 1.2023, where the upper boundary of the ascending channel passes, or sell immediately for a rebound from a larger resistance 1.2112, counting on a correction of 60-70 points inside of the day.

analytics5e7c4e7a31e60.jpg

Signals of indicators:

Moving averages

Trading is slightly above 30 and 50 moving averages, but so far buyers of the pound cannot get a special advantage in the market.

Bollinger bands

A break of the upper boundary of the indicator at 1.1935 will cause the pound to grow further, and a break of the lower boundary at 1.1720 will raise the likelihood of a resumption of the bearish trend.

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

EUR/USD: plan for the European session on March 26. Bulls continued to push the pair amid optimism about the rapid recovery

To open long positions on EURUSD you need:

Yesterday's purchases of European currency in the afternoon made it possible for the pair to maintain an upward correctional trend, and today's update of the next weekly high indicates the bulls' presence in the market, counting on the euro's growth. The adoption by the US Senate of a bill to allocate $2 trillion to support the economy affected by the coronavirus could lead to further strengthening of EUR/USD. To do this, the bulls need to cling to the resistance of 1.0930, from which the upward correction will continue to the area of new highs of 1.0975 and 1.1041, where I recommend taking profits. However, a more optimal scenario for new purchases will still be when a false breakout forms in the support area of 1.0880, and it is even better to return to long positions immediately to rebound from a low of 1.0790. Today's Economic Bulletin from the European Central Bank, which will be published in the morning, is unlikely to make major changes in the alignment of forces in the market.

analytics5e7c4bec53b52.jpg

To open short positions on EURUSD you need:

Euro sellers are not yet very active and are waiting for more suitable levels. The task of the bears in the first half of the day will be to form a false breakout in the resistance area of 1.0930, which will lead to increased pressure on the pair and a fall below the support of 1.0880. Under this level, the pressure on the euro is likely to increase, which will lead EUR/USD to return to the area of a low of1.0790, where I recommend taking profits. If the bulls turn out to be more persistent and achieve a breakthrough of resistance at 1.0930, it is best to return to short positions in the first half of the day only to rebound from resistance 1.0975, or even higher, in the region of a high of 1.1041, counting on a correction of 50-60 points within the day.

analytics5e7c4c0141e9a.jpg

Signals of indicators:

Moving averages

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

Bollinger bands

A break of the upper boundary of the indicator in the region of 1.0940 will lead to a new wave of euro growth. In the event of a decline, the pair will be supported by the lower boundary of the indicator in the 1.0790 area.

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

GBP/JPY Price Movement For March 26, 2020.

analytics5e7c246062fe7.jpg

The GBP/JPY pair a broke out from the small consolidation (Cyan Rectangle) making a market maker buy model pattern on the 4-hour chart. From the technical point, we see that the price is already moving above the EMA (30) and the CCI (30). It also lifted above the -100, 0 , and 100 levels. This information confirms that this pair resumed an upward momentum. It is likely to reach the nearest liquidity pool at the 133.37 as long as this pair does not retrace bellow the 129.84 level.

(Disclaimer)

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

Kiwi's trap for sellers

analytics5e7c347a2f0f9.jpg

Good day, dear traders. I present to your attention, an analysis of the NZD/USD pair.

Over the past three months, we have seen the decline of the pair accelerate by about 1000p. As a rule, such accelerations are the culmination of the current movement, where after which, the pair goes to a reversal.

analytics5e7c48dee3aed.jpg

Today, we have a short (horizontal level with sellers' stops) on the D1 timeframe, at the quote of 0.59150. If you are a seller of NZD/USD on D1, you will have to hide the risks behind this level:

analytics5e7c4909bea68.jpg

This is a trap that the sellers have fallen into, which will soon end. Don't miss this chance to make money on longs, so fix it at the breakout of 0.59150. The potential is 1000p from the current prices. If the price is given better, the potential may even increase.

Good luck in trading and control your risks!

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

Overview of the GBP/USD pair. March 26. Inflation in Britain is slowing. The Senate is ready to pass a 2-trillion package

4-hour timeframe

analytics5e7bf8e8b6c23.jpg

Technical details:

Higher linear regression channel: direction - downward.

Lower linear regression channel: direction - downward.

Moving average (20; smoothed) - sideways.

CCI: 130.6571

The GBP/USD currency pair worked out the moving average line on March 25, as well as the Murray level of "1/8"-1.1963. But as of now, we can say that these obstacles have not been overcome. Thus, the chances that the downward trend will be resumed increase, unfortunately for fans of the British pound. As before, we see that the reason for the new strengthening of the US currency can only be one – the belief of markets in the steadfastness of the US currency and its strength at any time. The pound has certainly been weak in the past three years, but not by so much as to lose 1,500 points in 10 days. Volatility, however, in contrast to the EUR/USD pair, remains quite high, about 300 points per day. Therefore, it is illogical to talk about calming the currency market now.

During today, only one worthwhile and significant report was published in the UK – inflation for February. We can immediately say that there was no special reaction from market participants to this publication. And the consumer price index did not change so much in February that you can expect a drop of 300 points in the afternoon. Inflation in Britain slowed from 1.8% to 1.7% y/y, while core inflation, on the contrary, increased from 1.5% to 1.7% y/y. However, in the current conditions, these data are frankly secondary.

However, the fact that the British currency was again under market pressure in the second half of the third trading day of the week cannot be ignored. We believe that the markets remain in a state of panic, at least for the GBP/USD pair. Both in the UK and the United States, the situation with the epidemic is difficult. Moreover, the forecasts of experts in the medical field predict a much higher number of diseases and deaths caused by the "coronavirus" in the next month and a half. Thus, the state of both economies is almost guaranteed to deteriorate. However, traders have more faith in the US dollar, whose government is willing to pour trillions of dollars into the economy just to stimulate it. It doesn't matter that such a huge amount of dollars simply increases the supply of the currency market. That is, logically, the US dollar should become cheaper after such government measures. However, traders and investors see positive aspects in this step and are ready to buy the US currency again. At least that's what it looks like right now.

Meanwhile, the US Senate, after two failed attempts to pass a bill to provide 2 trillion dollars in aid to the economy, is likely to approve it today. Previously, this bill was blocked by Democrats, but in a difficult time for the country, they still found common ground with Republicans and came to a common denominator. The administration of Donald Trump and the Senate also reached a consensus. This was announced today by the head of the Republican majority in the Senate, Mitch McConnell. "This is good news for doctors who are waiting for more masks and funding, for US families. We have an agreement. It will help workers, families, small businesses and all sectors of the economy," McConnell said. Senate Democratic leader Chuck Schumer said today that this is the largest aid package in US history. It is expected that about $500 billion will be directed to providing cheap loans to the most affected industries, $3,000 will be paid to American families, $350 billion will be directed to loans to small businesses, $250 billion – to increase unemployment benefits, and $ 100 billion – to help the health sector.

analytics5e7bf901e34ee.jpg

Meanwhile, the total number of "coronavirus" patients in the UK has exceeded 8,000. 434 people were killed. Over the past 24 hours, 87 people have died, which is the highest daily rate since the beginning of the epidemic in the country. It is also reported that a total of about 90,000 Britons were tested. Thus, it is possible that the calculations that we published in previous articles, concerning the fact that more than half of the population of the UK may be infected, may well be true. What are 90,000 people for a country of millions? Moreover, as doctors have repeatedly warned, the virus can not cause any symptoms and ailments in a person for up to 14 days. However, all this time, the person is the distributor of infection. However, the British authorities are well aware that with 90,000 British people tested, it is impossible to be sure that the COVID-19 epidemic has not already captured a large part of the country's population and purchased 3.5 million tests, as well as ordered millions more to test every citizen of the country. Also, scientists from Oxford report that as a result of the epidemic on the territory of the United Kingdom for more than two months, certain segments of the population have acquired immunity against the virus. If these hypotheses are confirmed, all quarantine measures can be lifted ahead of time.

From a technical point of view, the Heiken Ashi indicator turned down, and the bulls failed to overcome the confidently moving and the Murray level of "1/8"-1.1963. Thus, there is already a fairly high probability of resuming the downward movement. At the same time, we remind traders that the market continues to remain panicked, and the pound/dollar pair passes by three hundred points daily. Thus, it is also not necessary to exclude a trip to the north. Both linear regression channels are directed downward, so the overall trend remains downward. The bulls remain extremely weak, and the macroeconomic background has no influence on the pair's movement now. We believe that we still need to wait for the markets to calm down, as any trade now involves increased risks.

analytics5e7bf911d08a6.jpg

The average volatility of the pound/dollar pair over the past 5 days has started to decline and is already 351 points. However, the main decline was due to March 18, when the pair passed a record of 680 points. In general, the pound continues to pass at least 300 points a day, which is a lot. On Thursday, March 26, we expect the pair to move within the volatility channel of 1.1510-1.2208. Near the moving average line, the fate of the next few days will be decided.

Nearest support levels:

S1 - 1.1719

S2 - 1.1475

S3 - 1.1230

Nearest resistance levels:

R1 - 1.1963

R2 - 1.2207

R3 - 1.2451

Trading recommendations:

The GBP/USD pair continues to adjust at the moment. Thus, sales of the pound remain relevant with a target volatility level of 1.1510, but it is recommended to open new sell positions, not before the price is fixed below the level of 1.1719. It is recommended to buy the British currency with the target of 1.2207, but not before fixing the price above the moving average and the Murray level of "1/8"-1.1963. 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

Control zones for EUR/USD on 03/26/20

Yesterday, there was a continuation of growth after fixing above the weekly maximum. The main goal of the upward movement is the weekly control zone 1.1014-1.0997. Reaching this zone will allow you to close most of the purchases and consider the option of sales, if a reversal pattern is formed at the daily level.

analytics5e7c4580592b9.jpg

Work in the upward direction continues to be corrective for the last decline of the pair, however, holding part of the purchases is necessary, since the growth potential has not been used up and a violation of the downward structure can lead to a long formation of the accumulation zone of the upper period.

An alternative fall model will be developed if today's trading closes near yesterday's lows. This will allow us to talk about the formation of the pattern of "absorption" at the daily level. The probability of implementing this model is 25%, which makes selling from current marks not profitable at a distance.

analytics5e7c4592cf080.jpg

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

Overview of the EUR/USD pair. March 26. The US national debt due to the "coronavirus" epidemic may grow to 25 trillion dollars

4-hour timeframe

analytics5e7bf842c9b19.jpg

Technical details:

Higher linear regression channel: direction - downward.

Lower linear regression channel: direction - downward.

Moving average (20; smoothed) - downward.

CCI: 116.0337

The third trading day of the week passed for the EUR/USD currency pair in vain attempts to gain a foothold above the moving average line. According to the Ichimoku indicator, if the pair barely overcame the critical Kijun-sen line, then it will most likely perform a rebound from the moving average and will have a good chance of resuming the downward movement. As we have already said, the volatility of the euro/dollar pair has subsided a little, and this is an encouraging moment. If everything continues in the same direction, the pair will return at least to the values of 60-100 points per day. It is much more pleasant to trade a pair knowing that it will not break at any time by three hundred points in any direction.

On Wednesday, March 25, several macroeconomic reports were published that deserve attention. There was not a single significant publication in the European Union on this day. Only in Germany, several indices from the IFO were published. It is easy to guess that most of them were worse than the forecast values. For example, the index of economic expectations in March fell from 82.0 to 79.7, the index of business optimism – from 87.7 to 86.1, and the indicator for assessing the current situation – from 93.8 to 93.0. Losses are minimal, but the indices themselves from the research group CESifo are frankly secondary and did not cause any reaction even when there was no panic in the markets. Now, it was naive to expect that traders would rush to work out data on the expectations of 7,000 German business leaders.

Much more interesting data were published overseas. The main indicator of orders for durable goods in the US in February was 1.2% m/m with forecasts of -0.8% m/m. The indicator of orders for goods excluding defense showed an increase of 0.1% with weaker forecasts (-0.9% m/m). The indicator excluding transport orders was -0.6% m/m (forecasts were slightly better), while the indicator excluding defense and aviation orders was -0.8 m / m(forecasts were also slightly better). Thus, two of the four indicators exceeded forecasts, and two were worse. Based on this, we believe that the package of macroeconomic statistics from overseas is neither positive nor negative and, accordingly, could not cause a significant strengthening of the US currency in the afternoon of Wednesday. It should also be noted that all published indicators were related to the month of February, so they had a low value for market participants who are waiting for indicators for March when the epidemic gained momentum both in the United States and in the European Union.

Thanks to the coronavirus epidemic – bars, restaurants, cafes, sports facilities, schools, universities, and so on have been closed in the United States, as in many other countries that have declared quarantines. Thus, unemployment has soared, leaving millions of workers temporarily without wages and out of work. Given how much damage the epidemic has already caused to both the world economy and the American economy, it is naive to assume that when the virus is defeated, workers will simply return to their jobs and everything will heal as before. Most likely, the US, like other countries, will face a series of bankruptcies, no matter how the central bank and government stimulate the economy. So, in any case, the American economy has already sunk and will continue to do so. As early as today, the Senate could vote "Yes" to provide an additional $2 trillion in aid to households, small businesses, and companies on the verge of bankruptcy. The current national debt of the country is 23.5 trillion dollars. It is easy to calculate that after the next injection into the economy, the debt will be equal to 25.5 trillion dollars. It is reported that when Trump took office as President of the United States, the national debt was about 20 trillion and Trump promised to completely eliminate it by 2025. However, the projected economic growth of 6% was not achieved. Moreover, in the last year and a half, GDP growth has been declining from a maximum of 3%, "thanks" to the trade wars that Trump himself unleashed. Given the fact that the longer the country is in a state of quarantine, the more the economy shrinks. It is understandable why Trump insists on canceling all quarantine measures. According to the US President, the epidemic can be survived, but it is impossible to allow the economy to fall. "You can't just come in and say: let's shut down the US, the most successful country in the world. We need to get back to work," the American President believes. Also, Trump notes that thousands of people die every year because of the flu, but no one has ever thought of introducing a quarantine because of it. "A huge number of people are killed in car crashes, but we are not asking automakers to stop making cars," Trump said. According to the US leader, there will be much greater losses if the country enters a state of recession or depression. "A country can be destroyed by acting in this way, forcing its citizens to stop working. We had the best economic growth figures in the country's history three weeks ago," Donald Trump said.

analytics5e7bf86017bd7.jpg

In the United States, the number of people infected with "coronavirus", meanwhile, has grown to 55,500. And, as with the UK, the real number of people infected may be much higher.

From a technical point of view, the EUR/USD pair is currently trading near the moving average. Thus, another attempt can be made to overcome the moving average line, as well as the Murray level of "1/8"-1.0864. Both linear regression channels are directed downward, indicating a downward trend in the medium and long term. If traders do not manage to overcome the moving average, the chances of resuming the downward trend will increase several times.

analytics5e7bf878618d1.jpg

The average volatility of the euro/dollar currency pair remains at record high values but still begins to gradually decrease. At the moment, the average value for the last 5 days is 199 points and the last four days have shown volatility significantly below 200 points per day. On Thursday, March 26, we expect a further decrease in volatility and movement within the channel, limited by the levels of 1.0677 and 1.1075.

Nearest support levels:

S1 - 1.0742

S2 - 1.0620

S3 - 1.0498

Nearest resistance levels:

R1 - 1.0864

R2 - 1.0986

R3 - 1.1108

Trading recommendations:

The euro/dollar pair continues its upward correction. Thus, traders are still recommended to consider selling the euro currency with targets of 1.0742 and 1.0677 in the event of a price rebound from the moving average line. It is recommended to buy the EUR/USD pair not before fixing the price above the moving average with the first target of the Murray level of "2/8"-1.0986. When opening any positions, we recommend increased caution, since the market is still in a state of panic.

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

AUDJPY broke out of ascending trendline support to the downside! Further drop expected!

analytics5e7c22e4a34fc.jpg

Trading Recommendation

Entry: 65.708

Reason for Entry: Long term moving average resistance

Take Profit : 62.930

Reason for Take Profit: 61.8% Fibonacci retracement, graphical swing low

Stop Loss: 66.634

Reason for Stop loss: 61.8% Fibonacci retracement, ascending trendline resistance

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

Forecast for EUR/USD on March 26, 2020

EUR/USD

The euro added more than 90 points yesterday and reached the first target level of 1.0879. Today, the euro added another 50 points in the Asian session, clearly slowing down on the resistance of the balance line (red indicator ) of the daily price scale. The next growth target is the point of coincidence of the Fibonacci level of 38.2% with the enclosed line of the price channel in the region of 1.0967. At about the same moment, the signal line of the Marlin oscillator can touch the zero line - the boundary with the growth territory, and turn down.

analytics5e7c2527a498b.jpg

The price touched the MACD line on the four-hour chart, according to Marlin there is no reversal formation, as a result, the price can make a false exit above the MACD line with working out the target on the daily timeframe, after which we wait for the price to turn down with the target at 1.0636.

analytics5e7c253b08fcc.jpg

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

Forecast for GBP/USD on March 26, 2020

GBP/USD

The British pound traded in a wide range of 340 points in the range of Fibonacci levels of 238.2% and 200.0% yesterday. The correction goal at the level of 200.0% was thus fulfilled. The signal line of the Marlin oscillator begins to turn down, but not yet deep enough to accept the upcoming reversal as the beginning of a new downward movement. In case of overcoming yesterday's high (1.1972), it is possible to deepen the correction to the Fibonacci level of 161.8% at the price of 1.2235.

analytics5e7c2426228ba.jpg

The price is above the MACD line and the balance line on the four-hour chart, which is the main sign of maintaining potential for further growth. The first condition for moving down should be consolidating the price under the Fibonacci level of 223.6% at the price of 1.1750, after which there will be a movement to the level of 238.2% at the price of 1.1638 (yesterday's low) and only after overcoming it the target opens at the Fibonacci level of 271, 0% at the price of 1.1375.

analytics5e7c24399cf41.jpg

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

Forecast for AUD/USD on March 26, 2020

AUD/USD

The Australian dollar was growing by 108 points on Wednesday, but it ended the day by losing 10 points. The price turned around from the correction level of 50.0%, just a few points before reaching it. But since the aussie continued to decline today, the reversal can be considered valid. The Marlin indicator is also moving down. The aim of the reduction is the peak of August 2001 at the price of 0.5395.

analytics5e7c221e9a8b9.jpg

The price returns below the MACD line on the four-hour chart, the signal line of the Marlin oscillator is attacking the boundary with the territory of the negative trend. We look forward to further price reductions.

analytics5e7c22321f9e7.jpg

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

Forecast for USD/JPY on March 26, 2020

USD/JPY

As a result of yesterday, the USD/JPY pair fell by only 14 points, but the drop has now reached 65 points in the Asian session. The target level of 111.98 has not been fulfilled, but this is not a prerequisite for market reversals. The signal line of the Marlin oscillator has intensified a downward reversal.

analytics5e7c20fd3fdd7.jpg

The first obstacle in pulling down the price is the MACD line on the daily chart, at 109.24. Overcoming support opens the target range of 107.02/85 along adjacent lines of the price channel. Consolidation under the bottom line (107.02) opens the way for another four figures to decline, to support the embedded price channel line in the 102.70 area.

analytics5e7c2110420ba.jpg

The price remains above the indicator lines on the four-hour chart, which will keep the price from a sharp decline in the next day. The signal line of the Marlin oscillator has consolidated in the zone of negative values, this indicates the intention of the trend to continue to move down and further.

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

EUR/USD and GBP/USD. March 26. Key daily report: US jobless claims. Fed member Bullard believes unemployment will jump to

4-hour timeframe

analytics5e7c1cb84d99d.jpg

Average volatility over the past 5 days: 199p (high).

The EUR/USD currency pair began the fourth trading day of the week by continuing the correctional movement. We have already talked about the prospects of the currency pair in recent articles. Thus, the overall picture of the situation remains the same. In fact, now the key issue for the markets is still the issue of lifting quarantine measures in the United States. Recall that Donald Trump believes that "the cure for the disease should not cost the economy more than the disease itself." The American president believes that the epidemic is an epidemic, and the largest economy in the world should work, otherwise it will cease to be so. Approximately the same opinion is shared by representatives of various large banks in the world. Many predict a fall in the US economy from 12% to 25% if quarantine measures continue until the summer. Trump's sincere desire to prevent depression, the willingness to neglect the lives and health of the US population in order to be re-elected in the 2020 elections. These are the issues that traders are most interested in right now. What will change for the dollar if quarantine is canceled? We believe that, firstly, the US stock market will begin to recover. Secondly, the US currency will begin to be in even greater demand and may grow significantly against the euro, the pound and other currencies, which, by the way, is completely unnecessary for Trump. However, this is short term. If Americans go to work, then with almost 100% probability the virus will spread all over America in a matter of weeks, maybe days. It is unclear how will the economy work if around 70% to 100% suffers from pneumonia, albeit in mild manifestations.

James Bullard, the Chairman of the St. Louis Federal Reserve, also understands the danger of the current situation. According to him, 46 million people may be laid off because of the epidemic, and the unemployment rate will jump to a record 30%. Bullard also believes that all the measures taken by the White House will not save the economy from a recession or even a depression. After all, if the virus continues to spread and block the work of all spheres of life in America, then after a while, new incentives will be needed. And if the Federal Reserve and the Treasury Department constantly solve the problem by injecting new trillions of dollars into the economy, sooner or later there will be a collapse.

analytics5e7c1ccd92ef3.jpg

The United States has planned significant macroeconomic releases on Thursday, March 26. Firstly, this is an important indicator of GDP for the fourth quarter. According to expert forecasts, it will amount to 2.1% y/y, which fully coincides with the value of the third quarter. In general, it turns out that US GDP will continue to lose growth and is virtually guaranteed to decline in the first quarter of 2020. In addition, the index of expenditures on personal consumption of the US population for February will be released today, which in the current conditions is a secondary indicator. Even GDP is likely to be ignored by market participants.

analytics5e7c1d0cc048f.jpg

But the indicator of the number of applications for unemployment benefits for the week before March 20 can significantly affect the US currency and the demand for it. Recall that a week earlier the number of new applications reached 281,000 with a normal value of the indicator of about 220,000. Now, one million applications for benefits are immediately forecasted, which means a sharp jump in unemployment. This is not surprising given the epidemic and quarantine. However, in reality, the numbers may be even more negative. And this can provoke the fall of the US currency.

4-hour timeframe

analytics5e7c1d1f49d7d.jpg

Average volatility over the past 5 days: 351p (high).

The GBP/USD currency pair remained above the Kijun-sen critical line on March 26. The pound/dollar fell to this line during the US trading session on Wednesday, but rebounded from it, therefore, according to the Ichimoku system, the likelihood of continued upward movement is also considerable. The next step of the bulls will be an attempt to gain a foothold inside the Ichimoku cloud. However, we draw the attention of traders once again to the fact that the pair remains in a very excited state, so quotes may resume falling at any time simply because market participants consider the US currency to be the safest in times of crisis. We also pay attention to how reluctantly the pair is correcting, despite the high volatility.

analytics5e7c1d454b396.jpg

The key report today will, of course, be the report on applications for unemployment benefits in the United States, not GDP. However, several indicators will be published in the UK that may interest market participants. The greatest attention may be given to the indicator of retail sales in February. The indicator itself is interesting, but we have repeatedly focused the attention on the fact that the markets are not too interested in February reports at this time. Thus, no matter what the real numbers of the report are, traders are likely to ignore it.

The last thing I would like to say: The coronavirus infected 71-year-old heir to the British throne, Prince Charles. Doctors say that the disease in a member of the royal family is mild. It was not possible to establish exactly who the member of the royal family was infected from, since in recent weeks Prince Charles has participated in many events with a large crowd of people.

Recommendations for EUR/USD:

For short positions:

The euro/dollar continues a corrective movement on the 4-hour timeframe. Thus, it is recommended to sell the euro if the price consolidates below the critical line with the first goal, the level of volatility is 1.0677. The second target is the support level of 1.0476.

For long positions:

Formally, you can buy the EUR/USD pair now, since the price has crossed the Kijun-sen line, the Senkou Span B line is for the first purpose. However, we believe that the prospects for the upward movement are vague at the moment, so we advise that you trade for an increase, do so very carefully and in small lots .

Recommendations for GBP/USD:

For short positions:

The pound/dollar is trying to resume the upward movement, rebounding off the Kijun-sen line. Thus, it is recommended to sell the British pound with the goal of a volatility level of 1.1510 only after the price has consolidated below the critical line. The second goal is the support level of 1.1229.

For long positions:

You can the GBP/USD pair now, since a rebound from the Kijun-sen line has been made, with the first goal the level of volatility is 1.2212, but with very small lots. Also, as in the euro's case, it is recommended to keep in mind the increased risks when opening any positions.

Explanation of the illustration:

Ichimoku indicator:

Tenkan-sen is the red line.

Kijun-sen is the blue line.

Senkou Span A - light brown dotted line.

Senkou Span B - light purple dashed line.

Chikou Span - green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD indicator:

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

Support / Resistance Classic Levels:

Red and gray dashed lines with price symbols.

Pivot Level:

Yellow solid line.

Volatility Support / Resistance Levels:

Gray dotted lines without price designations.

Possible price movements:

Red and green arrows.

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