Analysis and forecast for EUR/USD as of April 1, 2021

In today's review of the main currency pair, we will summarize the results of the monthly and daily trading that ended the day before and look at the economic calendar to recall yesterday's reports, and outline today's reports that can affect the price dynamics of the euro/dollar. And let's start with the topic of the COVID-19 pandemic, which is still the most topical. So, virologists are already trumpeting the arrival of the third wave of coronavirus infection. After much consultation with doctors and reflection, French President Emmanuel Macron still decided to introduce the third lockdown. Children's and school institutions are closed for one week, after which children are expected to have a two-week vacation, after which they will start learning, however, remotely. A gradual return to the usual form of training is planned only in early May. Such measures are still due to the vaccination company, which will begin to gain momentum by mid-April, and during the summer months will continue to increase. However, different countries have their situation regarding measures that can counteract COVID-19. For example, in Sweden, despite the talk of the third wave of COVID, they plan to relax several restrictive measures.

If you look at the economic calendar, today I recommend paying attention to the initial applications for unemployment benefits in the United States, which will be issued at 13:30 (London time). But yesterday's employment data from ADP exceeded the forecast values and came out in the green zone. Often, these reports are perceived by market participants as a preliminary leading indicator before the release of official labor statistics - Nonfarm Payrolls. Well, let's see, we don't have long to wait. Time flies incredibly fast, and tomorrow is the last trading day of the week, which only began yesterday. So the trading of the first spring month ended, and the market closed yesterday in March.



According to the results of last month's trading, the pair did not fall much, it collapsed. A very strong decline began after the initial growth and reaching the level of 1.2112. It can be seen that the resistance here was so strong that the bears drove the quote to the important and significant level of 1.1700, and the March trading ended slightly higher at 1.1729. At the same time, several important and strong levels were broken, as well as the orange 200 exponential moving average and the red Tenkan line of the Ichimoku indicator. Looking at the monthly chart, it is clear that if the pressure continues, the next downside targets of the players will be a breakout of 1.1700 and a move to another very solid and significant level of 1.1600 for the market, since there is a fairly strong support area.

To radically change the situation in their favor, the euro bulls will need to make incredible efforts and return the pair above the iconic psychological level of 1.2000. Looking at the huge bearish candle in March and the growing strength of the US dollar across the entire spectrum of the foreign exchange market, it is hard to believe in such a scenario. However, we should not exclude the possibility that the market will take a pause and slightly correct before continuing the downward trend with a new force. I think a lot will depend on the ability of the true breakdown of the level of 1.1700, with a natural and mandatory consolidation below this mark. But we will judge this already by the lower time intervals. The picture on the monthly timeframe, namely the last candle, in my personal opinion, confirms the fact that the bullish trend has changed to a bearish one.



At yesterday's trading, the EUR/USD currency pair rose to 1.1760, but failed to gain a foothold there, and fell to 1.1729, where it ended the session on March 31. At the same time, you should pay attention to the long upper shadow of yesterday's candle, which does not bode well for those who are waiting for buy signals. On the contrary, the presence of such an impressive upper shadow exposes the problems of the bulls on the instrument and their attempts to raise the quote. On the other hand, the support at 1.1703 is still intact. Today, at the end of the article, the pair was already declining to 1.1712 but found good support there to change its price direction.

Trading recommendations for EUR/USD:

I will start with the fact that yesterday's proposals to try sales from the price zone of 1.1750-1.1770 were correct. Yes, the profit did not turn out to be large, as there is still strong support in the area of 1.1700. Today, I recommend paying attention to the same resistance level of 1.1760, where yesterday's highs were shown. If one or more bearish reversal candles close below it, on the four-hour or hourly charts, this will be a signal to open sales. I recommend looking for short positions at more attractive prices if the pair rises to the price zone of 1.1794-1.1804. From purchases that are corrective, it is better to refrain for the time being.

The material has been provided by InstaForex Company -