EUR/USD
Investors' expectations that the euro would fall on the differences in the US and eurozone macroeconomic indicators were justified. The ZEW index of business sentiment in the eurozone fell to -49.5 in March from 10.4 with an expectation of -23.1 points. In the US, retail sales decreased by 0.5% in February against the forecast of growth of 0.2%, but the fall of this index in the context of the growing epidemic was accepted by investors with understanding, but industrial production increased by 0.6% in February against the forecast of 0.4% and capacity utilization increased from 76.6% to 77.0%. This good news helped even stock indexes to increase by 5.2-9.13%. The strongest support for the markets was provided by the measures announced by the White House to provide financial assistance to the economy for $850 billion, also with tax benefits, and targeted support for individuals.
The euro lost 170 points yesterday, reaching the support of the embedded price channel line. The price has gone deep under the MACD line, the Marlin oscillator has entered the zone of negative values – the downward trend zone. In this position of precarious balance, the euro will face the Federal Reserve's FOMC monetary policy decisions at a scheduled meeting this evening. It is expected that the Fed will officially announce the easing – describe in more detail the plan to buy back government and corporate bonds on its balance sheet. Financial easing measures may increase investors' interest in risk, and we expect the stock indexes and the single currency to continue their corrective growth. But the Fed can limit itself to the measures already announced, then the markets will be presented to themselves.
The first growth target is the MACD line at 1.1075 on the daily chart. This will be enough to wind the signal line of the Marlin oscillator to the zero line. In other words, a formal correction is still expected in the form of consolidation in the 1.0978-1.1075 range.
A convergence is already formed on the four-hour chart for Marlin . We are waiting for the correction to be completed and the market to determine its intentions after evaluating the economic support measures introduced by the authorities.
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