Indicator analysis. Daily review of EUR/USD on April 6, 2020

Trend analysis (Fig. 1).

Today, from the level of 1.0806 (closing of the Friday afternoon candle) the pair may begin a pullback upward movement, with the target of 1.0840, a pullback level of 23.6% (red dashed line). If this level is reached, the upward work will continue with the target of 1.0965 - 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 - down;

- Weekly schedule - up.

General conclusion:

Today, the price will try to start moving up with the target at 1.0965 - a pullback level of 38.2% (red dashed line).

An unlikely scenario: from a pullback level of 23.6% - 1.0840 (red dashed line), work down, with a target of 1.0758 - a pullback level of 76.4% (blue dashed line).

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CFTC report showed that investors are doubting the dollar; Overview of USD/CAD and USD/JPY pairs

The US employment report in March turned out to be noticeably worse than forecasts, which, however, had little impact on markets that were completely prepared for such disastrous data, since they already had information about the explosive growth in unemployment applications in the second half of March.

701 thousand jobs were lost, the unemployment rate increased from 3.5% to 4.4%, participation in the labor force decreased from 63.4% to 62.7%, and only wages increased slightly, which is a reaction to the pumping of markets with liquidity and indirectly indicates that the decrease in jobs was most likely caused by the hiring of new workers, rather than mass layoffs.

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As the United States is confidently becoming the world leader in the number of cases of COVID-19, and the pace of economic slowdown is accelerating, we should expect that the failed employment report for March is only the first stage of the apocalypse, and the next report will be much worse.

The CFTC report reflected weak changes in investors' positions in major currencies. OIt is possible to reduce a short position at a CSD and a reduction in long in JPY, which indicates the stabilization of the currency market and the gaps made in the first weeks of the panic.

At the same time, the long position in the euro has increased again, which remains the leader of speculative demand in the medium-term, while on the contrary, there is an increase in the short position of the dollar. These changes indicate a fairly stable bearish sentiment on the dollar, which is still not falling due to increased demand due to the need to service a huge debt mass.

Moreover, bearish pressure on the dollar is increasing. It may decrease this week, primarily against the euro and the franc, which may be supported by updating information on slowing the spread of coronavirus in Europe.

USD/CAD

The reduction in the bearish position on the CFTC reports and the strong growth of oil limited the growth of USD/CAD, the estimated fair price is not far from the current level, the trend is down, which indicates an increased probability of a decrease in the pair over the next few days.

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The employment report in Canada will be released a week behind the US, so there is no data on how many jobs the Canadian economy lost in March. At the same time, it should be noted that the number of unemployment claims in the US over the past 2 weeks has increased by 10 million, while in Canada, the growth was about 2 million during this time, which is proportionally even higher than in the United States. This means that the employment report, which will be published on Thursday April 9, will most likely be worse than expected and put pressure on the loonies.

Technically, USD/CAD forms a classic "flag" pattern; trading is in a narrowing range. A strong impulse for the Canadian currency is not expected until Thursday, but a weak employment report will increase the chances of getting out of the range and consolidating above resistance 1.4348. Support is at 1.4070 / 90, which is the most logical range trading until Thursday.

USD/JPY

Despite the fact that the combined long position of the JPY declined by 0.68 billion, it is still in favor of the yen. Other factors, such as increased demand for bonds and gold, indicate that the current stabilization in the currency market is temporary. The estimated fair price of USD/JPY is significantly lower than the current level, and the probability of the pair falling to the 104 level remains.

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Mizuho Bank notes that the current indicators of the Japanese economy suggests a significant deterioration in the coming weeks. The dynamics of demand in the bond market leads to this conclusion, and studies on inflationary expectations indicate that consumer prices are slowing down, and deflation is preparing to cover the Japanese economy once again.

These trends strengthen the yen, which is reflected in the dynamics of the estimated fair price and the position of speculators. Now, short-term growth of USD/JPY will end below the resistance zone at 111.40 / 70, the nearest target is 109.39, where the formation of a local top and a downward movement is possible to the support zone at 106.90.

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EUR/USD. Obvious - incredible: catastrophic NonFarms supported the dollar

The euro-dollar pair showed a pronounced downward momentum last week, dropping from 1.1119 to 1.0773. The pair fell with small corrective pullbacks, but if you look at the weekly chart, it becomes obvious that the dollar held a clearly dominant position throughout the five-day trading period.

The current week also started with a slight correction. Thanks to the gap, the pair returned to the framework of the eighth figure, but further growth is moving slowly – each subsequent point is given to the EUR/USD bulls with great difficulty. Traders only trust the US currency, considering it a safe haven. And what is interesting is that extremely negative statistics from the US, contrary to obvious logic, played into the hands of the dollar. Market participants were so frightened by the Nonfarms that the greenback again began to enjoy increased demand, reflecting the increased anti-risk sentiment.

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It is worth noting that the previous ADP report, which was published last Wednesday, created a false impression of the scale of the disaster in the US labor market. Experts of this agency said that in March, the number of employed people decreased by only 27,000 (with a forecast of a decline of 150,000). Although the abnormally high increase in the number of applications for unemployment benefits suggested the opposite trends, the ADP report gave hope for the best. And for good reason.

Nonfarms were weaker than even the weakest forecasts. The number of people employed in the non-agricultural sector in March decreased by 700,000, while the forecast of a decline of 100,000. The number of employees decreased by 713,000 in the private sector of the economy, and by 18,000 in the manufacturing sector. The unemployment rate jumped from 3.5% to 4.4%. According to some experts, the real situation is much worse. First, although Nonfarms reflect the situation after the beginning of the epidemic, they are still two weeks behind the report on applications for unemployment benefits. Let me remind you that this figure initially jumped to three million, and then to six million. According to some data, some states do not have time to process requests in time, so even such a huge increase may be understated. According to experts, the dynamics of growth in these applications corresponds to a 10% unemployment rate. So the next can demonstrate more disastrous results.

In other words, Friday's data on the US labor market once again reminded us of the scale of the economic crisis, while the number of infected and dead from Covid-19 continues to grow around the world, and especially in the United States. March Nonfarms provoked a surge of panic, allowing the dollar to regain its position across the market.

Especially since the European currency is under the weight of its own problems. Let me remind you that the leaders of the European Union at the online summit could not agree on the scale and tools to support the economy. At the same time, the press started talking about a serious split between the "South and North" of Europe. The key stumbling block was the so-called "crown bonds" - a common debt instrument for all EU countries that would help finance the response to the coronavirus pandemic. The leaders of Italy and Spain, which are the countries where the most widespread outbreaks of the virus occurred, called for the early introduction of such bonds. In turn, the main opponents of the idea were Germany, the Netherlands and Austria. The German chancellor said that in this case, it is necessary to resort to borrowing from the European stabilization mechanism. As a result, the six-hour online summit ended without result – the parties agreed to continue the dialogue at the level of Finance Ministers, so that in two weeks – that is, this Thursday, April 9 - they will again hold a teleconference.

According to available information, the parties could not come to a compromise – at least, the dialogue at the level of Deputy Finance Ministers also ended without result. Germany and the countries of the "North" that have joined it are against the issue of crown bonds, while representatives of the "South" still insist on this option. A meeting at the ministerial level is due to take place tomorrow, and if the parties do not find a common denominator, a repeat online summit of EU leaders may be in danger of being disrupted.

Yesterday, European Commission President Ursula von der Leyen, following the head of the European Council, said that Europe needs a Marshall plan - in her opinion, in the near future it is necessary to invest billions of euros in the EU budget to prevent an economic disaster. Despite such an ambitious statement, the market reacted coolly to it – apparently, traders doubt that the leaders of European countries will come to a compromise solution, and the split between the "North and South" will only worsen.

Thus, the euro-dollar pair this week will continue to react sharply to macroeconomic statistics from the US (in particular, to the weekly data on the growth in the number of applications for unemployment benefits) – and the worse they are, the more actively traders will invest in the dollar. The situation is anomalous, but the fact remains that as long as the market sees the US currency as a safe haven, it will acquire it in any bursts of uncertainty. But the European currency is waiting for tomorrow's meeting of EU Ministers, and, in fact, the leaders of European countries. If the parties still find a compromise, the euro will receive significant support. Otherwise, dollar bulls will continue to dictate their terms.

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Thus, short positions on the pair in the medium term are still a priority. The downward movement is aiming for the 1.0730 mark – this is the lower line of the Bollinger Bands indicator on the weekly chart. But it is advisable to go into sales when the bears return the price to the seventh figure. Now the pair shows a correction that can end at the bottom of the ninth figure (the lower boundary of the Kumo cloud on the daily chart).

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Technical Analysis of BTC/USD for 06/04/2020:

Crypto Industry News:

According to the Adoption of Digital Asset Trading report, about 100 cryptocurrency trading systems have been launched for institutional clients. Senior executives believe that large companies would be interested in taking advantage of the recent cryptographic crisis, in particular Bitcoin

The electronic currency trading companies that took part in the study are aware of the growing interest in Bitcoin derivatives. About 57% of traditional trading companies traded Bitcoin and 29% traded another cryptocurrency, Ethereum.

Based on the survey, it was determined that XRP, despite being the eighth most popular digital asset, was XRP / USD ranked 5th in the ranking of institutional companies.

According to the respondents, the biggest problems are security gaps in exchanges and fear of burglary. Another negative issue is fear of losing reputation, which is why many commercial institutions do not want to offer digital assets.

Despite these concerns, 97% of traditional trading companies are considering trading in digital assets over the next two years, according to a survey.

Technical Market Outlook:

During the weekend the BTC/USD pair has been trading inside of a local consolidation zone located between the levels of $6,568 - $6,989. On early Monday morning the bulls are in control of the price and are trying to test the level of $6,989 and might even push the prices higher. Nevertheless, the last rally has failed to continue and market has made a red Pin Bar candlestick pattern after the breakout. The rally was short-lived and currently the Bitcoin price has returned to the main channel area and is again trading below the red zone. If the bearish pressure will intensify again, then the price might move even lower towards the technical support located at $6,568 or even towards the level of $6,271.

Weekly Pivot Points:

WR3 - $8,726

WR2 - $7,938

WR1 - $7,363

Weekly Pivot - $6,545

WS1 - $5,997

WS2 - $5,159

WS3 - $4,567

Trading Recommendations:

The fear of the coronavirus consequences is very strong among the global investors and it rules on the financial markets. So far the global investors are not so keen to invest in Bitcoin and treat BTC as a digital gold. The larger time frame trend remains down and as long as the level of $10,791 is not violated, all rallies will be treated as a counter-trend corrective moves. This is why the short positions are now more preferred.

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Technical Analysis of ETH/USD for 06/04/2020:

Crypto Industry News:

According to Union Bank CEO Edwin Bautista, the COVID-19 pandemic will lead to the end of cash and accelerate the adoption of digital banking services, including central bank cryptocurrency,.

In a television interview, the head of UnionBank, the ninth largest bank in the Philippines, said it could be the beginning of the end of physical cash, at least for the Philippines, a country whose preventive measures against the spread of the virus are difficult for people living on over 2,000 islands.

It is also difficult for the central bank of the country, which must improve its ability to deliver banknotes to banks and ATMs scattered around the islands. The most reasonable option is to focus on the digitization of the financial system to the extent that people can use digital money for everyday needs.

Bautista predicts that eventually banks will have to test and spend digital cash, and maybe even cryptocurrency. He is proud that UnionBank is already one of the most digitally advanced banks in the region. The bank introduced several external command and control systems for its digital system and asked some employees to work from home. That is why 95% of the bank's branches are currently open, despite the fact that 75% of employees work remotely.

Last month, UnionBank opened 7,000 new accounts that are fully digital, while 20,000 customers downloaded the bank's digital application within a month. Last week, members of the company's management board had their first fully digital meeting.

Technical Market Outlook:

The ETH/USD pair has made a new local high after a breakout through the weekend consolidation zone has been made. The new high was made at the level of $148.63 in the time of writing the article. Nevertheless, the Ethereum is still trading below the level of $149.52 and the bulls are still trying to make use of the momentum behind this move up and move higher towards the level of $153.44, which is a technical resistance for the price. On the other hand, if the bulls fail here, then the next technical support is seen at the level of $132.21 - $130.87. Please notice the decreasing momentum on ETH/USD on H4 time frame chart during the last move up.

Weekly Pivot Points:

WR3 - $180.45

WR2 - $163.97

WR1 - $154.32

Weekly Pivot - $137.76

WS1 - $127.39

WS2 - $112.43

WS3 - $101.19

Trading Recommendations:

The fear of the coronavirus consequences is very strong among the global investors and it rules on the financial markets. So far the global investors are not so keen to invest in cryptocurrency, because they are being perceived as risky assets. The larger time frame trend on Ethereum remains down and as long as the level of $214.67 is not violated, all rallies will be treated as a counter-trend corrective moves. This is why the short positions are now more preferred.

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Control zones for USD/JPY on 04/06/20

The further growth of the pair will depend on today's close of trading relative to the weekly control zone 1/2 108.98-108.79. If it is possible to consolidate above this zone, then the next growth target will be the weekly control zone 111.11-110.72, which is located near the maximum of last month. It is important to understand that growth is an impulse structure, so the probability of an extremum updating is above 70%.

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Last week, the Bank of Japan supported the weakening of its national currency. Today, operations to reduce the yen continued.

To form an alternative decline model, it will be necessary to close today's trading below the weekly control zone 1/2. This will allow you to look for sales at tomorrow's Asian session. The probability of implementing this model is 30%, which makes selling from current grades not profitable.

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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 USD/CHF on 04/06/20

The probability of continued growth is 75%. This allows you to keep purchases open last week. In this regard, it is better to open new purchases after a correctional decline. The first support is the weekly control zone 1/4 0.9709-0.9701. When testing this zone, the formation of the "absorption" pattern will be required. This will allow you to enter the purchase with a growth potential of more than 100 points.

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Work in the upward direction is a priority, therefore, the probability of retesting the high of last week is above 75%.

An alternative model will be developed if the closing of today's trading occurs below the weekly control zone 1/4. This will allow us to consider a deeper correction, which will allow us to obtain favorable prices for the purchase. The defining support is the weekly control zone 1/2 0.9625-0.9609. Its testing will determine future priority.

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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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Elliott wave analysis of EUR/GBP for April 6 - 2020

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The 61.8% corrective target of wave iii at 0.8747 protected the downside well as expected and prices bounced nicely of this support. Minor resistance at 0.8818 has been broken. It means that wave iv is completed and we are now looking for a break above 0.8867. It will indicate that wave iv has completed and wave v towards 0.9742 is developing.

in the short-term, we see support at 0.8809 and strong support at 0.8760 that ideally will protect the downside as the expected fifth wave (wave v) rallies through resistance at 0.8867 for more upside progress towards the next minor target at 0.8990 on the way higher.

R3: 0.8990

R2: 0.8900

R1: 0.8867

Pivot: 0.8848

S1: 0.8826

S2: 0.8804

S3: 0.8760

Trading recommendation:

We are long EUR from 0.8760 and we will move our stop higher to 0.8730.

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Elliott wave analysis of GBP/JPY for April 6 - 2020

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Short-term support at 132.70 continues to protect the downside. So, a final spike to just above 134.73 may occur. We do believe that as time passes this possibility is fading away and the possibility of a clear break below 132.70 and more importantly a break below support at 132.10 will be more likely. A break below 132.10 will confirm that wave iv has completed and wave v to below 123.99 is unfolding. This should be the final decline in the series from the 156.61 and set the stage for a new strong rally back to at least 156.61 and possibly higher.

For now, stay focused on minor support at 132.70 and more importantly support at 132.10 as the trigger for the onset of the final decline to below 123.99.

R3: 135.50

R2: 135.05

R1 134.72

Pivot: 134.40

S1: 133.45

S2: 132.70

S1: 132.10

Trading recommendation:

We are short GBP from 134.45 with our stop placed at 135.45

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EUR/USD price movement for April 06, 2020

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As We see from the 4 hour Chart, Fiber broke the trend line. The Candlestick is already moving below the EMA 30 and the Divergence between the CCI (30). The pair is likely to reach and break through the nearest liquidity pool at 1.0773 as the first target and the 1.0720 as the secondary target. As long as Fiber does not retrace above the 1.0903 level then it may break the nearest liquidity pool target.

(Disclaimer)

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GBP/USD: plan for the European session on April 6. Pound will continue to decline to support 1.2146

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

Released at the end of last week, data on a sharp increase in the number of people employed in the non-agricultural sector by more than 700,000 did not put much pressure on the US dollar, but led to a decrease in the GBP/USD pair, which was trading in a side channel throughout the week. The bears managed to gain a foothold and protect the level of 1.2315, which has now transformed into the resistance of 1.2305. Today, buyers in the first half of the day need to urgently return the pair back to the level, since it will be possible to retain the advantage in this scenario. If the GBP/USD continues to decline, and most likely it will, then it is best to return to long positions only after the support test of 1.2146, provided that a false breakout is formed there, or a rebound from the larger low of 1.1985, in the expectation of a correction of 60-70 within the day. A breakout and consolidation above the resistance of 1.2315 will push purchases to the highest area of 1.2473, where I recommend taking profits.

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

The bears coped with the weekly task and returned the pair to the 1.2315 level. Today, you can return to short positions after an upward correction to the resistance of 1.2305, provided that a false breakout is formed there, which will be a signal to open new short positions in order to update the larger lows of 1.2146 and 1.1985, where I recommend taking profits. If the bears prefer to retreat again, as evidenced by the lack of active sales after a false breakout in the resistance area of 1.2305, then I recommend returning to short positions only for a rebound from last week's high in the 1.2473 area.

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Signals of indicators:

Moving averages

Trading is conducted below 30 and 50 moving average, which indicates the preservation of the bearish scenario in the short term.

Note: The period and prices of moving averages are considered by the author on the hourly chart H1 and differs from the general definition of the classic daily moving averages on the daily chart D1.

Bollinger bands

A break of the upper boundary of the indicator in the region of 1.2305 will lead to a larger growth of the pound. Breakout of the lower boundary in the region of 1.2215 will increase the pressure on the pair.

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
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EUR/USD: plan for the European session on April 6. Weak US labor market data did not greatly disappoint traders. Bulls count

To open long positions on EURUSD, you need:

Friday's data on a sharp increase in unemployment in the US to 4.4% and an increase in the number of people employed in the non-agricultural sector by more than 700,000 did not put much pressure on the US dollar, as it did not lead to its collapse against a number of world currencies. Traders calmly reacted to the disappointing statistics, adequately perceiving what is happening in the world. However, a slowdown in the pair's decline in the short term may play into the hands of euro buyers. The initial task of the bulls today in the first half of the day will be to return to the resistance of 1.0833, just above which the moving averages pass. Consolidating on this range will make it possible for you to think about continuing the upward correction amid profit taking by bears, with a likely test of the high of 1.0894 and an update of the larger resistance of 1.0955, where I recommend consolidating the profit. If the pressure on EUR/USD persists further after weak German indicators and investor confidence, it is best to return to long positions only after updating the low of 1.0776, provided that a false breakout is formed, or immediately on a rebound from the larger support of 1.0718.

To open short positions on EUR USD you need:

Given the lack of demand for the US dollar as a safe haven asset at the end of last week after the terrible reports on the US labor market, we can conclude that the bears will take a pause at the beginning of the week and will not actively dispose of risky assets like the euro. It is necessary for sellers of EUR/USD to protect the 1.0833 range, where the formation of a false breakout will be a signal to open short positions in expectation of further decline of the pair to the lower boundary of the descending channel and to update the weekly lows with a break of the support 1.0776 and test a larger area 1.0718 where I recommend to take profit. In case the pair grows above the resistance of 1.0833 in the first half of the day, even against the background of weak data on investor confidence in the eurozone, it is best to return to sales only after the test of a large resistance of 1.0894, or short EUR/USD immediately to rebound from the high of 1.0955.

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Signals of indicators:

Moving averages

Trading is below 30 and 50 moving averages, however, the first signs of a downward trend slowdown have already appeared. Be careful with short positions at current lows.

Note: The period and prices of moving averages are considered by the author on the hourly chart H1 and differs from the general definition of the classic daily moving averages on the daily chart D1.

Bollinger bands

A break of the lower boundary of the indicator in the region of 1.0776 will raise pressure on the euro. A break of the upper border at 1.0833 may lead to a larger upward correction of the pair.

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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Forecast for AUD/USD on April 6, 2020

AUD/USD

The Australian dollar has been trading in the Friday range since the Asian session opened. The price and indicators are in a downward position, waiting for the target level to reach the embedded line of the 0.5830 price channel. When this goal is reached, the second one will open – support for the embedded price channel line in the 0.5470 area.

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The four-hour chart shows support for the MACD line at 0.5965. Crossing the line opens the nearest target of 0.5830. The Marlin oscillator on H4 is developing in the zone of negative values, in the downward trend zone with a hint of weak convergence. There may be a short-term consolidation in the range of 0.5965-0.6077 before further a price fall.

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Forecast for GBP/USD on April 6, 2020

GBP/USD

The British pound fell by 128 points on Friday, stopping at the Fibonacci level of 161.8%. The Marlin oscillator still needs to fall by a few in order to be in the negative trend zone. The 1.1935 target is maintained.

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The H4 chart shows a slight consolidation at the Fibonacci level of 161.8%. Even today, it is possible to move down with the nearest goal of 1.2065 - to support the MACD line. Overcoming this line will continue the trend towards the goal of 1.1935.

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Opening a short position is possible after overcoming the lower consolidation limit of 1.2204. Stop loss is higher than today's peak.

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Forecast for EUR/USD on April 6, 2020

EUR/USD

The main event on Friday was the release of data on employment in the US. The figures came out worse than expected, but after the data on applications for unemployment benefits, investors were ready for anything. In the non-agricultural sector, 701,000 jobs were lost – this is a historical record for this indicator. The forecast was at -100 thousand. The overall unemployment rate rose from 3.5% to 4.4%, with an expectation of 3.8%. Without emotion, investors continued to buy the US currency, which justified our strategic idea of buying the dollar in any statistical data. The difference can only be in the subsequent interpretation of the ongoing strengthening of the dollar.

Data on the eurozone will be published today, which can already become direct support to the euro bears: the volume of industrial orders in Germany for February is expected to decrease by 2.4-2.7%, the Sentix index of investor confidence in the eurozone for April is expected to be -30.3 against -17.1 in March.

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On the daily chart, the euro is falling in the planned mode to the first goal of 1.0625 – to support the embedded line of the price channel. Indicators show only the continuation of the downward trend.

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On the four-hour chart, the price was consolidated under the MACD indicator line – there was a change in the short-term trend to a downward one.

Trading recommendation: after overcoming yesterday's low of 1.0773, sell with a take profit above 1.0625, stop loss above today's high.

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USDCAD approaching ascending trendline support!

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Trading Recommendation

Entry: 1.41305

Reason for Entry: 50.0% Fibonacci retracement, Ascending trendline resistance.

Take Profit : 1.43489

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

Stop Loss: 1.40125

Reason for Stop loss: 78.6% Fibonacci extension

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EUR/SGD approaching 1st resistance, potential drop expected!

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Trading Recommendation

Entry: 1.56136

Reason for Entry: Horizontal overlap resistance, 50% Fibonacci retracement

Take Profit : 1.55405

Reason for Take Profit: Horizontal overlap support

Stop Loss: 1.56583

Reason for Stop loss: Horizontal overlap resistance

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AUD/USD facing pressure from resistance, potential for further drop!

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Trading Recommendation

Entry: 0.60988

Reason for Entry: Horizontal swing high resistance, 50% Fibonacci retracement

Take Profit : 0.58870

Reason for Take Profit: 50% Fibonacci retracement, horizontal swing low support

Stop Loss: 0.61684

Reason for Stop loss: Horizontal swing high resistance, 78.6% fibonacci retracement

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Forecast for USD/JPY on April 6, 2020

USD/JPY

Stock indexes fell last Friday, with the release of disastrous data on US employment: EuroStoxx 50 -0.95%, FTSE 100 -1.18%, S&P 500 -1.51%. But the dollar preferred growth against the yen following the general weakening of world currencies. During the development of the global crisis, we are still waiting for a new wave of decline in the USD/JPY pair, but at the moment the price still has a small potential for growth. The first serious resistance is the MACD line on the daily scale chart – 108.90, which the price is already trying to overcome. Success will allow the price to rise to the MACD line on a smaller scale H4 - 109.75. The Marlin oscillator is in the growth zone, which indicates a high probability of further price growth.

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Overcoming the upper limit of the trading range 106.95-107.80 will allow the price to stay in it for some time to accumulate forces to break out with the goal of 102.65, determined by the embedded lower line of the price channel.

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On the four-hour chart, the price is higher than the balance indicator line, and Marlin is in the zone of positive values in a growing position. With overcoming the resistance of 109.75 along the MACD line, the price could grow even higher, but here the resistance of record levels increases more significantly – there are price consolidations of mid-January and February, March 2019 low, etc, in the range of 109.60-110.30.

So, going over the current day (109.10) opens the target range of 109.60-110.30, purchases are associated with increased risk. It is impractical to open short positions today, since the primary conditions are not ready, even for leading indicators. Today's price fall, if it takes place, will only prepare these conditions.

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Control zones for USDCAD on 04/06/20

The pair has formed an accumulation zone over the past five days. The boundaries that will hinder further movement are the extremes of the previous week. The upper reference point is the weekly CZ 1.4350-1.4319. Support is the weekly control zones of 1.4037-1.4007. Tests of the specified zones should be perceived as an opportunity to search for deals inside the range.

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Work within the framework of the flat involves inputs and outputs at its boundaries so that transactions will be limited to the range.

To exit the flat, you will need to consolidate the pair above one of the weekly control zone positions during the US session. This will allow you to change the trading style to an impulsive one. Closing trades above 1.4350 will allow you to consider medium-term purchases, while a consolidation below 1.4007 will indicate the beginning of a change in the medium-term momentum to a bearish one.

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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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Control zones for NZDUSD on 04/06/20

The pair settled below the weekly CZ of 0.59170.5902 on Friday. This makes it possible to hold sales that were opened earlier and look for new opportunities to open a short position. Favorable prices for selling are within the range of the WCZ 1/2 0.5922-0.5915. The first target of the decline will be the 0.5777 level. The weekly control zone of 0.5752-0.5737 is located just below this mark.

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Work in the downward direction can become the main one for the entire current week.This will allow you to hold part of the position in order to reach the March low in the medium term.

The alternative growth model has a low probability and will develop only if an absorption pattern forms below the daily level. Monday's close should be above Friday's high. This will allow you to consider the bullish direction of trading and refuse to sell.

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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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EUR/USD. Preview of the week. OPEC+ meeting. Waiting for the peak of coronavirus infection. Trump's refusal to wear a protective

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What do traders expect in the new trading week? We have already described all possible options for the movement of the currency pair. Thus, we can only consider all the macroeconomic events that are planned for this week and hope that they will cause at least some reaction from market participants.

So, let's start with Monday. No important economic data will be available to traders on April 6. And, from our point of view, this will be a good opportunity to start a correction. The euro/dollar pair began to show signs of a corrective movement at the end of Friday. However, they were so weak that they cannot be taken seriously. Perhaps, the euro currency will get a little support on Monday, as we have already talked about a new round of consolidation of the currency pair up.

On Tuesday, Germany will publish an industrial production indicator for February. And even taking into account the fact that in February there was no such scale of the epidemic as in March, and the quarantine has not yet been introduced, the production rate may still fall by 3.9% in annual terms, and by 1% in monthly terms. However, looking at the long-term chart of changes in the indicator, it becomes clear that almost two years ago, the rate of production growth began to decline, and then slow down. Thus, the cause is not the coronavirus epidemic. But thanks to the help of coronavirus, the growth rate of industrial production in the country - the locomotive of the European economy can decrease even more. But this will become clear by the end of March.

There will be no publication of economic reports on Wednesday, April 8, but in the evening there will be the publication of the minutes of the last meeting of the US Federal Open Market Committee. It is rare for the minutes to have a serious impact on the currency market. Most likely, even now it will be ignored by traders.

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The next report on applications for unemployment benefits in the United States is scheduled on Thursday, which has recently become one of the most important reports. The last two weeks showed that the number of applications initially increased by 3.3 million, and then by 6.6 million. According to experts' forecasts, in the week up to April 4, the number of new applications for unemployment will be another 5-5.15 million. Thus, the labor market is highly likely to continue to shrink, but we should also recall the words of US Treasury Secretary Steven Mnuchin who urged not to pay too much attention to this indicator, as the Fed and the US government provided unprecedented assistance to the economy, which should stop its decline. However, it takes at least three weeks to feel the positive effect of the measures taken. As these three weeks have not yet passed, we are still seeing it with the decline of the US economy and the decline of the labour market.

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Also scheduled for this trading day is the University of Michigan's consumer confidence index, which fell from 101 to 89.1 in March, and could decline further in April, to a value in the 70-75 range.

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The release of inflation for March is planned on the final trading day of the week, which, according to experts' forecasts, should slow down from the current 2.3% to 1.5-1.6% in annual terms.

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The core consumer price index is likely to remain unchanged from February at 2.3% YOY. Thus, according to these two indicators, all goods and services in the United States, except for consumer and energy resources, will not change the growth rate of their rise in price. But inflation, taking into account consumer goods and, most importantly, oil, will slow down its growth rate.

The package of macroeconomic information in the new week will be quite small. And if you reject all the news, which is 90% likely to be ignored by traders, then there is only one report - on applications for unemployment benefits. It is possible that a virtually zero macroeconomic background will lead to an even greater decrease in volatility, which we will consider as another step towards stabilizing the situation in the world. However, the OPEC+ meeting can also significantly help stabilisation, as part of which a decision can be made to reduce production volumes by key market players. The meeting was originally scheduled for April 6, and oil prices soared on Friday amid upcoming talks. However, today it became known that the summit participants decided to postpone the meeting to April 8 or 9, which will give additional time to agree on the terms of future agreements. Recall that due to the coronavirus pandemic, the demand for oil around the world has significantly decreased, which negatively affected the prices of black gold. However, in addition, the OPEC countries could not agree on changing the parameters of the deal to reduce the volume of oil production, or on its extension. Russia wanted to maintain the existing conditions, and Saudi Arabia insisted on further reducing oil production. As a result, all previous agreements ceased to operate and Saudi Arabia increased production on April 1, which finally finished off the price of oil of all varieties.

Even on weekends, US President Donald Trump continues to be the main news-maker in the world. At a time when the pandemic has taken over the whole world, and the largest number of infected citizens is observed in the United States, Trump believes that wearing a mask is "just a recommendation". He said that wearing a mask in the White House does not correspond to the status of the president. "I feel good. I just don't want to do it. Sitting in the oval office at a beautiful, large desk and wearing a mask, greeting presidents, prime ministers, dictators, kings... This is not for me, " Trump said. It should be noted that opinions among doctors about wearing a mask in order to reduce the spread of infection are divided. Some doctors believe that there is no special sense in masks, since they should not be used for more than two hours in any case, after which they should be thrown out. That is, an ordinary citizen may need from 1 to 5-6 masks per day. Such a number of masks simply does not exist and it makes no sense to produce them, given the fact that the coronavirus is spread not only "through the air". People can become infected when they come in contact with the surface which was previously touched by an infected person. However, most doctors still agree that wearing a mask reduces the rate of growth of the pandemic.

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Recommendations for the EUR/USD pair:

We believe that the influence of the fundamental background next week will not be too strong. Thus, more attention should still be paid specifically to the technical picture of 4-hour timeframes. On both trading systems that we represent, short positions are currently relevant with targets near 1.0742 and 1.0673, but there are no signs of the beginning of a correctional movement. Nevertheless, a reversal to the top of the MACD or Heiken Ashi indicator may indicate a round of upward correction.

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GBP/USD. Preview of the week. Morgan Stanley analysts predict the collapse of the US economy. +100,000 infected over the

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The British pound, which seems to have resumed its downward trend at the end of last week, is unlikely to be dependent on macroeconomic statistics next week. Throughout the week, three more or less significant reports will be published in the UK. However, given the fact that market participants continue to ignore statistics, it is likely that traders will continue to trade in accordance with technical factors. We have already described all possible options for the pair's movement in the near future. However, do not forget that in addition to technical factors, there are so-called non-speculative transactions on the currency market. There are a huge number of agents on the market who carry out transactions to buy and sell any currency not for profit, but for current needs, to maintain operating activities, to hedge future risks, and to form portfolios designed to preserve the value of assets. Thus, many large market participants can continue to trade within their strategies, which strongly affects the movement of all pairs, including the pound/dollar.

Well, the coronavirus is still the main cause of panic in the currency and global markets. As of the morning of April 5, about 1.2 million diseases were registered worldwide. In the United States - 312,000 cases, in the UK - 42.5 thousand cases. Thus, the epidemic continues to spread and it is not yet possible to stop it. Despite the fact that we have concluded that the participants of the foreign exchange market will calm down, if the situation with the pandemic does not improve, we may well witness a second wave of panic. After all, a pandemic, as we have said many times, is not just a sore that you can get over and forget about it. For the world economy, this is the source of a new crisis, recession, and perhaps even depression for many years to come. In addition, this is also a loss of life. In Britain, 708 people have died in the past day... The situation in the United States is also frightening. We have already informed readers of the forecasts of Donald Trump and some other members of Congress, who believe that the COVID-19 virus can kill up to 200,000 Americans. The numbers really look terrible. Meanwhile, things are very bad in New York state. The epidemic hit this state and the city of New York the most. US President Donald Trump has decided to send 1,000 military personnel to help in the fight against the coronavirus. 10,000 ventilators are also being sent to the state.

No macroeconomic reports will be published in Britain on Monday, Tuesday and Wednesday. Traders will witness more or less significant data only on Thursday. On this day, data on GDP in February will be available, as well as a preliminary estimate of the GDP growth rate for March. We believe that this data will not interest the majority of market participants at all. The report on industrial production in the UK will also not cause any interest, as it will relate to February. No data will be received from Great Britain on Friday. Thus, the macroeconomic background will be extremely weak for the pound/dollar this week. The only really important report will be the data on applications for unemployment benefits in the US. However, in the past times, traders also did not react too zealously to it, despite the unprecedented growth in the value of this indicator.

Meanwhile, global rating agencies, banks, and conglomerates continue to calculate possible losses for the US (and global) economy in 2020. For example, analysts at Morgan Stanley believe that the US economy will shrink by 3.4% in the first quarter of 2020. The world's largest economy will collapse by 38% in the second quarter. The unemployment rate will be 15.7% in the second quarter. It should be noted that the forecasts of the US Congress are much more optimistic. For example, GDP may decline by only 7-8% in the second quarter. Other sources say that the US economy is already in the largest recession in the last 80 years. If you look at the latest reports on NonFarm Payrolls and applications for unemployment benefits and compare them with similar data for 2008 (the time of the mortgage crisis), it immediately becomes clear that the current crisis and the fall in the economy will be much stronger. World experts agree that if the pandemic persists for a month or two, all the measures taken by the US government will not have a beneficial effect and will not stop the economic downturn. Moreover, they are not enough to keep companies from continuing mass layoffs, not enough to support ordinary Americans and those who lost their jobs. It is quite possible that they will not be enough to support all companies that are on the verge of bankruptcy (first of all, we are talking about airlines). Thus, the Trump administration nearly has no choice. The longer the crisis will last, the greater must be the new stimulus injections into the economy of the United States. Most likely, the trillion-dollar package of measures that was adopted relatively recently will clearly not be the last.

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Recommendations for the pair GBP/USD:

The pound/dollar is now trying to resume the downward trend. Therefore, we recommend considering trading on the downside at the beginning of the new week. According to the Ichimoku indicator, the system speaks of the permissibility of sell positions with a target level of volatility of 1.2099 on Monday. Buying the British pound is not recommended until the price consolidates above the Kijun-sen line.

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

GBP/USD. Result of the week. The US economy could be affected more by the epidemic than by the 2008 mortgage crisis

24-hour timeframe

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The British pound remained in one place for most of the past week. At the same time, its movement cannot be called flat in the literal sense of the word, since the pair continued to pass 100-200 points daily. Only on Friday, April 3, an attempt was made to resume the downward movement, and the price returned to the area below the critical line. However, from our point of view, it is too early to talk about resuming the downward movement. We believe that the currency market is beginning to calm down smoothly and therefore not only volatility will fall, but also the strength of movements. Based on this, if the markets do not again fall into a state of panic (which can only be caused by an emergency), the price is unlikely to fall to the support level of 1.1481 in the near future. Most likely, the channel of movement of the pound/dollar pair will now gradually narrow.

In the final article for April 3, we already said that now the pair has two main options for the development of events. Either a resumption of the downward trend or a "correction against correction". To be honest, we are still leaning towards the second option. Thus, we expect the pair to fall to the area of 1.18. However, as has been said many times, much will depend on the coronavirus epidemic, on the timing of the invention of the vaccine, on the duration and scale of the pandemic, and on the amount of damage that the epidemic will cause to the economy of each country. Thus, from an economic point of view, we may well witness a "second wave" of panic in the currency, commodity and stock markets. Now the number of infected people around the world is 1.1 million. Representatives of the health sector suggest that the "peak" has not yet passed. This means that there will only be more infected people every day. So the quarantine measures will be extended. This means that the economy will not recover and will continue to decline. And this is a very real prospect for the next one and a half to two months. In the UK, the number of people infected with the virus is approaching 40,000. In the last 24 hours, 684 people died, which is 20% more than the previous day. The total number of dead is 3,611. On this indicator, Britain is already ahead of China. Temporary field hospitals will be built in the country specifically for patients with the COVID-2019 virus.

Macroeconomic statistics in the UK on Friday were presented only by the index of business activity in the service sector, which fell from 53.2 to 34.5. In principle, all the countries in the eurozone were marked by similar reductions, so traders did not pay attention to this report. But in the United States, the economic information package deserved the highest attention. First, the unemployment rate for March was published. According to experts' forecasts, unemployment was expected to increase to 3.8%, but in reality, the growth was up to 4.4%. Given more than 10 million new applications for unemployment benefits in the 2 weeks of March, this level of unemployment is still quite good. Although in almost any case, it will grow and in April may begin to approach forecasts of the member of the monetary committee of the Fed, James Bullard, who talked about 20-25%. A hidden unemployment rate was also published by the US Statistics Office, which reflects not only the number of people temporarily unemployed, but also those who have work, but are dissatisfied with it and want, but cannot, change it. This indicator increased from 7% to 8.7%. The least important and significant indicator of changes in average wages in the current conditions increased in March by 3.1% in annual terms and by 0.4% in monthly terms. Finally, the number of new jobs created outside the agricultural sector Nonfarm Payrolls was -700 thousand, with a February value of +275 thousand and a forecast of -100 thousand. The last time a comparable NonFarm value was recorded was in 2008-2009, during the mortgage crisis. However, then everything started with a gradual reduction and only after 12 months, the absolute minimum value of about -800 thousand jobs was reached. Now it all started immediately with a drop of 700 thousand, which suggests that, first, the next months for NonFarm Payrolls will not be much better, but most likely worse, and, secondly, the American economy may suffer from the "coronavirus" epidemic much more than from the mortgage crisis.

This crazy day, in terms of statistics, ended with the publication of business activity indices in the US services sector. According to Markit, in March, business activity decreased from 49.4 to 39.8, and according to ISM – from 57.3 to 52.5. And from our point of view, the ISM index is completely untrue. Recall that any business activity value above 50.0 is considered positive. In other words, this sector of the economy is growing. How could there have been growth in the US service sector in March, when the epidemic was already raging and about 10 million people were applying for unemployment benefits? But in any case, traders could only fix in their notes the entire package of statistical information from overseas to use them in the future. Despite absolutely failed statistics from the United States, the US currency rose in price on Friday and did not pay any attention to the published information.

Thus, it follows from all the above that technical factors remain the most important and significant. The macroeconomic background can only show certain temporary moments when the mood of market participants may change. But it is recommended to trade 90% based on technical factors. On the 24-hour timeframe, we expect that the Bollinger Bands will begin to narrow, thus working out the fall in volatility. However, we recommend trading, as in the case of the euro/dollar pair, solely based on the analysis of the 4-hour timeframe. Moreover, it is on the 4-hour timeframe that the possible start of a new downward trend is now visible.

The last thing I would like to report is that British Prime Minister Boris Johnson remains in self-isolation in his residence at Downing Street, as he was previously infected with the "coronavirus" and at the moment he still has a high temperature and other signs of illness. On Twitter, he wrote: "Although I feel better and spent a week in isolation, unfortunately, I still have important symptoms. I still have a fever. According to government policy, I need to remain in isolation until all symptoms disappear. But we continue to work on our program to defeat this virus."

Trading recommendations:

On the 24-hour timeframe, the pound/dollar pair is trying to resume its downward movement, but we believe that it will not be as strong as the previous one. However, both timeframes (4h and 24h) indicate a resumption of downward movement. Therefore, it is recommended to consider sell positions and goals on the 4-hour timeframe. It is recommended to return to purchases of the British pound not before fixing the price above the Kijun-sen lines on both timeframes.

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

EUR/USD. Result of the week. More than 1.1 million people have already been infected with the "coronavirus". Tests of the

24-hour timeframe

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All that we described in the final article for April 3 is more clearly visible on the 24-hour timeframe. If you close your eyes to the abnormal volatility in the last month and a half, you can see the following. The EUR/USD currency pair first went about 700 points up (for no good reason), then 860 points down (an even stronger movement, which means a new trend), and then began to adjust. The first round of correction up – about 500 points, the next round of correction down – about 370 points (at the moment). Thus, volatility decreases and the price returns to the levels at which it was before the panic in all world markets. It is this moment that gives hope for the recovery of the currency market and the return of its participants to normal trading. So far, we believe that the markets continue to recover after the first two strong up and down impulses. And it may take another week or two.

Unfortunately, the situation with "coronavirus" is not improving. According to the latest information, about 1.1 million people are infected worldwide. In the most interesting United States and the European Union, about 278,000 and more than half a million people are infected, respectively. In the United States, more than 1,300 people died from the COVID-2019 virus over the past day, and the total number of victims exceeds 7,000. The situation in the European Union is no better. In Italy, Spain, and France, the problems of the epidemic are most acutely felt. In Italy, the total number of victims is already almost 15,000 (more than other countries in the world), in Spain and France, a total of about 20,000 deaths. Thus, it is still impossible to say that the peak of the epidemic has passed and now things will go on the mend. In Australia, the United States, Israel, and some other developed countries, the development of a vaccine against "coronavirus" was announced. In the United States, the first tests of the vaccine were conducted on mice and scientists called them encouraging. The American vaccine provokes the immune system of mice to produce antibodies to the virus and neutralize its particles. Thus, now the trials, after appropriate permits, will be conducted on volunteers and, if successful, the vaccine can start being produced in a few months. However, given the current state of affairs, "in a few months" does not sound too optimistic. But it's better than nothing.

This week, a large amount of macroeconomic information was published in the European Union and the United States. The news flow started on Tuesday with the report on inflation in the European Union (slowing from 1.2% y/y to 0.7% y/y in March), as well as the unemployment rate in Germany (5.0%). Slowing inflation in the EU is logical since hardly anyone expected that against the background of falling demand for entire categories of goods (in fact, the demand is now only for food and medicine), prices will rise. Next month, inflation may decline even further. But the German unemployment rate, of course, pleased traders, as it did not change in comparison with February. If the German mark still existed, it could expect to grow in a pair with the dollar. On Wednesday, the unemployment rate in the European Union was published, although, for February, it fell from 7.4% to 7.3%. Since this report did not refer to March, it did not arouse any interest among market participants.

Well, on Friday, even though all the main macroeconomic data came from overseas, the European Union also had something to pay attention to. The least interesting report (retail sales for February) showed an increase of 3.0% in annual terms and 0.9% in monthly terms. In general, the business activity indices in the services sectors of the EU countries were even more failed than experts expected, and the indicated preliminary values for March. The Spanish index fell in March from 52.1 to 23.0, Italian – from 52.1 to 17.4, French – from 52.5 to 27.4, German – from 52.5 to 31.7, and the pan-European – from 52.6 to 26.4. Without going into details, we can say that over the past 12 years, there have never been such weak levels of business activity in the services sectors of the EU countries. Even during the mortgage crisis of 2008-2009. This data means that the service sector is completely worth it. Which, in principle, is not surprising, given the widespread quarantine associated with the epidemic. Now we can only wait for GDP data for the first quarter of 2020 or separately for March and estimate the losses of the European and American economies in absolute terms. It looks like the numbers will be extremely low and disappointing. All macroeconomic statistics for the States are reviewed in the article on GBP/USD.

How will all this affect the euro/dollar pair? Unfortunately, it is unlikely that we will see a reflection of macroeconomic statistics on the chart. After a month and a half of ultra-volatile trading, the pair is now at about the same price levels as before the panic. So, nothing has changed in the past month and a half. From a technical point of view, the 24-hour timeframe is currently not suitable for forecasting. Formally, we have a "dead cross" sell signal, and the price is located below the Ichimoku cloud. However, for example, the Bollinger indicator is so wide at this time (the distance between the upper and lower bands is more than 800 points) that it allows almost any variants of price movement. In this review, we said that there is a high probability that a new round of upward correction that will start at this time. On a 24-hour chart, this option is not obvious. All target levels (support/resistance) are located far away and are unlikely to be worked out, given the gradually decreasing volatility. The MACD indicator regularly changes the direction of movement but is very late with these reversals relative to price reversals. Thus, we recommend paying more attention to the 4-hour timeframe, where the picture is more suitable for analysis and forecasting.

The last thing I would like to note is the growth of black gold quotes at the end of the week. WTI crude rose to $28.79 per barrel, while Brent crude rose to $34.90 per barrel. The gradual recovery of the oil market is also a good signal for traders.

Trading recommendations:

On the 24-hour timeframe, the euro/dollar pair can be said to have resumed its downward movement after a strong correction to the Kijun-sen line. However, we believe that it is best to trade now using the 4-hour timeframe analysis since there is a high probability of an upward correction. Sell positions are still more relevant now since there is no sign of the beginning of a corrective movement at the moment.

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