4-hour timeframe
Technical details:
Higher linear regression channel: direction - sideways.
Lower linear regression channel: direction - sideways.
Moving average (20; smoothed) - downward.
CCI: -63.8100
The EUR/USD currency pair continues to trade fairly calmly with relatively high volatility compared to quiet periods of time, and with relatively low volatility compared to crisis periods. On average, the euro/dollar pair now passes about 100 points per day. At the end of the previous week, the pair's quotes were fixed back below the moving average line, so now the trend for the pair is downward. The naked eye can see that the markets continue to calm down, and the pair itself is consolidating in the range of 1.08-1.10. Thus, on the one hand, we have a fairly good chance of forming a new downward trend, and on the other hand, there is also a "correction against correction" scenario, which has already been completed, but now, according to our assumptions, the pair will consolidate in a sideways or relatively sideways channel for some time. Thus, the option of moving up to the Murray level of "2/8"-1.0986 is also not excluded now.
Meanwhile, Donald Trump last weekend once again said that the "peak" of the epidemic in the United States was behind and the country is beginning to relax quarantine measures. Next Monday, the states of Texas and Vermont will begin allowing some businesses to resume operations, and the state of Montana will begin lifting restrictions on Friday, April 24. This was stated by Trump at a regular briefing at the White House. At the same time, most of the US state governors have warned the US President that they will not lift restrictions prematurely. Many governors do not want to risk the lives and health of the population of their states and insist on pre-testing everyone for "coronavirus" and only then will they be ready to ease the quarantine measures. Donald Trump himself at this time "updated" his forecasts for the death rate from the COVID-2019 virus in the United States. Now, according to the US President, about 60,000-65,000 Americans will die from the epidemic. The US leader also announced a $ 19 billion aid package for American farmers. It is noted that due to the outbreak of "coronavirus", many farmers were forced to destroy their products, as demand has sharply decreased. It should also be noted that Donald Trump will continue to negotiate with the governors of all states, as he believes that "stopping public life at the national level can not be a long-term solution." States will be "opened" if no cases of the disease are registered on their territory within 7 days. The US President also said that the removal of the quarantine will take place in several stages. The first involves opening restaurants, bars, gyms, and other public facilities. The second is the opening of educational institutions. Groups of up to 50 people will be allowed to collect and optional trips will be allowed. At the last, third stage, restrictions will be lifted even for potentially vulnerable groups, and all institutions in the country will be able to resume work.
At the same time, a new conflict begins to flare up between China and the United States. If the EU countries simply allowed themselves to question the official information regarding the "coronavirus" coming from China, and the UK said that it would not be able to do business with the Middle Kingdom, as before, then Donald Trump openly accused China of hiding the real facts. In particular, the real number of deaths from the COVID-2019 virus in China. According to President Trump, the epidemic could have been stopped in time and done so in China. However, the Chinese authorities hid many facts about the new virus, which became a determining factor in the spread of the pandemic around the world. Earlier, the Associated Press reported that China has been silent for 6 days about the fact that the "coronavirus" can be transmitted from person to person. And the American TV channel Fox News said that "patient zero" was an employee of the laboratory of the Institute of Virology in Wuhan. According to Fox News, the virus "came out" from the lab, not from animals on the loose or in the markets. It is also reported that the Chinese authorities specifically came up with a version about the spread of the virus through the Wuhan Huanan Animal and Seafood Market. Donald Trump has already said that the United States is investigating this situation and will take appropriate measures. The US leader also said that if it turns out that China specifically hid certain facts about the disease, it will have to bear responsibility. "We (the US) are not in the first place in terms of mortality from coronavirus. China comes first. With a large margin. They know it, we know it, everyone knows it," Trump said. The head of the White House also hinted that relations between China and the United States may now deteriorate completely. Donald Trump noted that at the beginning of the year, the countries signed the "first phase" of the trade agreement. However, now that "China has done it", relations may break down. "Everything will depend on how the virus spreads. Whether it was a mistake, or it was done deliberately," Trump summed up. Thus, now China is on the verge of war (thank God, not in the literal sense of the word) with the world. Especially if it turns out that the virus really "escaped" from the lab. Especially if it turns out that Beijing was hiding the facts. Especially if it turns out that the coronavirus leak was not accidental. Now we can only assume that the "coronavirus" began its journey around the world not by accident. It is also no accident that the virus hit the US more than other countries of the world. And this happened just at a time when China had to sign a not very profitable trade deal with the United States. Of course, this is just an assumption. After all, any person can give as an argument the fact that not only the United States but the whole world was infected. However, this hypothesis can be considered as one of the versions of the non-random appearance of the virus.
On the first trading day of the week, you should not expect much from the euro/dollar pair. No macroeconomic reports are scheduled for April 20, so volatility may remain weak on this day. If the scenario with consolidation is implemented, we will see the growth of quotes to the Murray level of "2/8". Otherwise, we expect the Heiken Ashi indicator to turn down and resume forming a new downward trend.
The volatility of the euro/dollar currency pair has stabilized around 100 points per day. Thus, fears for a new wave of panic in the market are still premature, but traders continue to behave quite actively. On April 20, we expect the pair's quotes to move between the levels of 1.0779 and 1.0967. The reversal of the Heiken Ashi indicator downwards may indicate the end of the upward correction cycle.
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 EUR/USD pair has started a round of corrective movement against the downward trend. Thus, traders are advised to wait for its completion and again trade down with the targets of the volatility level of 1.0779 and the Murray level of "0/8"-1.0742. It is recommended to consider buying the euro/dollar pair if the price is fixed back above the moving average, with the goals of 1.0967 and 1.0986.
The material has been provided by InstaForex Company - www.instaforex.com