Forex analysis review
Forex analysis review |
- Overview of the GBP/USD pair. April 12. The real consequences of Brexit on the island of Ireland: riots broke out in Northern
- Overview of the EUR/USD pair. April 12. Joe Biden's new stimulus plan may be buried in the US Senate.
- Analysts of the Kraken crypto exchange: bitcoin will continue its growth to $ 90,000
- Helpless bulls and the ban of the British bank HSBC to its customers to buy shares of MicroStrategy
- What is next for Ripple's XRP?
- Bitcoin at major resistance close to providing new buy signal
- Ethereum reaches our target from April 1st
- Litcoin confirms our bullish setup and makes new higher highs
- GBP/USD. Preview of the new week. Inflation in America may rise to 2.5%-2.6% y/y.
- EUR/USD. Preview of the new week. The euro currency is heading for 1.2092.
| Posted: 11 Apr 2021 06:57 PM PDT 4-hour timeframe
Technical details: Higher linear regression channel: direction - upward. Lower linear regression channel: direction - downward. Moving average (20; smoothed) - downward. CCI: -97.9443 The British pound was trading lower on Thursday and Friday. However, although the downward trend remains in general, even on the 4-hour timeframe, it is clear that the movement of the last weeks is more like a "swing". The price regularly overcomes the moving average in both directions: for example, the local minimum of 1.3669 on Friday could not be overcome. In general, the entire downward movement of the pound in recent weeks looks like a banal technical correction after a long upward trend. The correction is as uncertain and weak as possible. There are a lot of factors that can start to influence the British currency at any time. Starting with the failed economic and geopolitical fundamental background from the UK, ending with "global factors", such as the pace of recovery of the US and British economies or the inflation of the money supply in the US. There is also a "speculative" factor. Therefore, it is now quite difficult to determine which of them affects the pound/dollar pair, and which do not. However, in any case, Britain does not stop there. As early as May 5, elections to the local parliament will be held in Scotland, and there is doubt that Nicola Sturgeon's party will strengthen its strength. And immediately after the victory of the Scottish National Party, an independence referendum will be initiated. The last decade has clearly shown us that referendums are not always held with the consent of the central government. Thus, Edinburgh can also come up with its own "workaround". Boris Johnson, after all, refused to give the right to a second referendum (the first was in 2014). However, this is not the main thing now. The main thing is that on the island of Ireland, it was not possible to solve the problem of Brexit and implement the Northern Ireland protocol so that it was accepted by the Northern Irishmen themselves. All those points and provisions that looked great on paper do not work very well. Riots broke out in Northern Ireland. It is believed that the official reason for the riots is the refusal of the Prosecutor's Office of Northern Ireland to punish politicians who participated in the funeral of the Irish Republican Army fighter Bobby Storey. However, many people express their dissatisfaction with the terms of Brexit, noting the deterioration in living standards after the UK left the European Union, and Ireland remained in it. Mass riots are accompanied by arson attacks on cars and police throwing Molotov cocktails. This development was feared in London even when Brexit was just being discussed with the EU. The fact is that on the island of Ireland, there were bloody battles with the British government on national grounds for 30 years, which were only extinguished in 1998. Many experts predicted the emergence of unrest if Northern Ireland and Ireland are on different sides of the border that has arisen on the island. The riots began, and it is quite difficult to say when and how they will end. At the same time, the Irish authorities understand the seriousness of the problem and offer London to organize an emergency meeting to resolve the crisis on the island. Dublin believes that the strong tension between the various political forces in Northern Ireland is a serious problem that has escalated since Brexit and it requires immediate intervention. In Dublin, it is proposed to hold a meeting in Northern Ireland with the participation of top officials in the relevant political areas from Northern Ireland, Ireland, and England. However, London is in no hurry to hold such a meeting, as it believes that this may anger the Unionists, who may regard everything that is happening as an excessive interference of Ireland in the affairs of Northern Ireland. In general, serious problems continue to ripen in the Foggy Albion, which can reach their climax in the coming months. We can only observe the situation. Of course, all these events, which have already occurred or will only happen, can hardly be called positive for the British currency. However, the main point continues to be that the market participants continue to pay no attention to the fundamental background from the UK. It looks like buyers just started to weaken their positions in recent weeks, which allowed the overbought pound to fall slightly below the sky. We have already said that if market participants took full account of the fundamental background from the Kingdom, the pound would already be "caught" around the 30th level. But there is no collapse, so from the current position, the pound can move in any direction, and any movement can be explained easily and simply. There are a lot of factors that can now influence the pound and the dollar. Thus, the pound remains at this time a "dark horse", whose future is extremely difficult to predict.
The average volatility of the GBP/USD pair is currently 96 points per day. For the pound/dollar pair, this value is "average". On Monday, April 12, therefore, we expect movement within the channel, limited by the levels of 1.3607 and 1.3799. The reversal of the Heiken Ashi indicator back to the top can signal a new round of upward movement. Nearest support levels: S1 – 1.3702 S2 – 1.3672 S3 – 1.3641 Nearest resistance levels: R1 – 1.3733 R2 – 1.3763 R3 – 1.3794 Trading recommendations: The GBP/USD pair started a downward movement on the 4-hour timeframe. Thus, today it is recommended to stay in the sell orders with the targets of 1.3672 and 1.3611 until the Heiken Ashi indicator turns up. Buy orders should be opened in case of overcoming the moving average with the targets of 1.3824 and 1.3855 and keep them open until the Heiken Ashi indicator turns down. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 11 Apr 2021 06:57 PM PDT 4-hour timeframe
Technical details: Higher linear regression channel: direction - downward. Lower linear regression channel: direction - downward. Moving average (20; smoothed) - upward. CCI: 75.9549 The EUR/USD currency pair was trading fairly calmly on the 4-hour timeframe on Friday. This is perfectly noticeable in the indicator of the volatility of the pair for the day. It was only 54 points, which is a very low value, bordering on the definition of "low". However, the pair's quotes remained above the moving average line, so the upward trend continues. Although both linear regression channels are now directed downwards. We have already said that we expect a new upward trend to form since the euro/dollar pair has already adjusted sufficiently in 2021, so now we can buckle up and take the course to the 23rd level and higher. Of course, in the modern world, everything changes very quickly in the financial markets, and the number of factors that hypothetically affect a particular economy is quite large. But it will not be possible to take into account all the factors and combine them in any case, so we continue to focus on the most global ones. As we said earlier, there are now two such global factors for the euro/dollar pair: the factor of inflating the money supply in the US and the factor of the difference in the speed of recovery of the US and EU economies. We believe that the first factor is more important, so we bet on the continued growth of the pair and the depreciation of the US dollar in 2021. However, it should be remembered that any fundamental hypothesis necessarily requires technical confirmation. Simply put, if the "foundation" and "technique" coincide. There are now two pressing issues for the US currency. Everything is quiet and peaceful in the European Union. First, the States have conceived by forcing the introduction of a single corporate tax around the world, which is beneficial to the States themselves (especially now that the national debt has grown to obscene proportions, and Joe Biden is going to raise taxes for the rich and corporations and initiates another package of incentives for US infrastructure for $ 2.6 trillion), as well as to all rich and developed countries where the corporate tax rate is high. Poor, developing, and small countries, of course, do not need such a tax at all, because low taxes are almost the only option for them to attract large corporations and fill their budget with tax revenues from them. By the way, this scheme is beneficial to all, except for the rich countries, which lose huge tax revenues to their budget. However, we will not talk about justice now. There isn't much of it in the world anyway. If the United States raises corporate taxes, and a single corporate tax rate is introduced around the world, there will be a massive migration of companies from country to country. It is far from a fact that if a single rate is introduced, all large companies will immediately rush to their homeland. After all, the problem for them is not only in taxes but also in the cost of labor or the cost of living in a particular country. Simply put, in Malaysia, everything is cheaper, compared to America. Therefore, even if the income tax rates are the same, most likely, the companies will remain in Malaysia, as there is much cheaper labor, cheaper logistics, easier to negotiate with the authorities. However, there will also be companies that will be unprofitable to stay in offshore companies. And there will be some companies that, on the contrary, will leave the States because of the new, higher tax. Thus, if these initiatives are implemented, then in the next couple of years there will be a massive movement of capital and production around the world. What threatens the economy of each country is still unclear. In any case, this is not a near-term prospect for the dollar. Secondly, Joe Biden decided to implement another package immediately after the 1.9-trillion stimulus package, which will mostly be aimed at infrastructure development. However, this project involves just raising several taxes for the rich and large corporations at once. From our point of view, this is a double-edged sword, because, in the end, the final consumers will still pay these taxes. Prices for goods will simply rise, and companies will have an "ironclad" explanation – taxes have increased. However, this bill will still need to be pushed through the US House of Representatives and the US Senate. What if there were no problems with Joe Biden's first package of incentives because the US legislation is full of loopholes that allow almost any bill to be passed by a simple majority, and not 2/3 of the votes. And since the Democrats have a majority in both the lower house and the upper house, there shouldn't be any problems this time either. But it turned out that all Republicans are against raising taxes and another giant stimulus package. And even some Democrats are against such budget measures. For example, Senator Joe Manchin has already said that he and several other senators may oppose Joe Biden's package and oppose tax increases. Manchin's opinion is quite categorical: "The bill cannot exist in the form in which it is presented." This means that either the project must be finalized, or it will be rejected completely. Of course, at the moment, it is difficult to imagine what would happen if they went against Joe Biden. Most likely, all opponents will be persuaded, and the bill will be passed by a simple majority in both chambers. However, there may be problems with the second "rescue plan". For the US dollar, the lack of new cash injections into the economy will be great news, as the money supply in the US will not inflate even more, which will allow the dollar to avoid a new fall against its main competitors.
The volatility of the euro/dollar currency pair as of April 12 is 68 points and is characterized as "average". Thus, we expect the pair to move today between the levels of 1.1831 and 1.1967. The reversal of the Heiken Ashi indicator downwards signals a possible round of a downward correction. Nearest support levels: S1 – 1.1841 S2 – 1.1780 S3 – 1.1719 Nearest resistance levels: R1 – 1.1902 R2 – 1.1963 R3 – 1.2024 Trading recommendations: The EUR/USD pair continues its upward movement. Thus, today it is recommended to stay in long positions with a target of 1.1963 until the Heiken Ashi indicator turns down. It is recommended to consider sell orders if the pair is fixed back below the moving average line with targets of 1.1780 and 1.1719. The material has been provided by InstaForex Company - www.instaforex.com |
| Analysts of the Kraken crypto exchange: bitcoin will continue its growth to $ 90,000 Posted: 11 Apr 2021 05:44 AM PDT
While bitcoin continues to "stomp" and "push" around the level of $ 60,000, analysts continue to predict the future value of bitcoin. Many experts of the cryptocurrency market note that April has always been a good enough month for "digital gold", thus, the growth of the number one cryptocurrency will continue. According to the company's calculations, bitcoin can grow to $ 90,000 per coin in April. However, according to the experts of the exchange, a serious correction should first follow - at least by $ 10,000. The company's report also says that in March, bitcoin rose by 30% and shows an increase of more than 10% per month. Thus, the company concludes that the upward trend is likely to continue. Meanwhile, CoinShares (which is the largest company in Europe by the amount of bitcoin) has published its financial report for 2020. According to this report, the company's profit doubled due to bitcoin investments. The company's total profit increased to $ 22.4 million, which is 2 times higher than in 2019. The company's assets grew almost 3.5 times in 2020 and now amount to $ 2.4 billion. "The fourth quarter of 2020 will be remembered by the world community as a turning point for bitcoin and other cryptocurrencies. The world has begun to recognize them as a genuine asset class. This new class of financial services has begun to attract institutional capital on a large scale," said CoinShares CEO Jean Marie Mognetti. At the same time, various experts tried to explain why bitcoin has not been able to update its highs for more than a month. According to Michael Ross-Johnson, director of the crypto platform Chatex, the news background is to blame. According to the head of Chatex, if a new positive background arrives, then bitcoin will be able to continue its growth. However, the news background should be really strong and positive, as bitcoin is already trading very expensive. Some experts believe that in 2021, the prospects for bitcoin will depend entirely on the mood of large and institutional investors. According to some, when the crisis is over and the economy recovers, investors may want to return to traditional and low-risk investment tools. Thus, the outflow of investments from the cryptocurrency segment may begin. However, for such a development, the majority of investors must want to sell bitcoin and buy stocks and bonds. At the same time, if the world is faced with a full-scale third "wave" of the COVID epidemic, it could provoke governments around the world to provide even greater financial support to their economies. And investors in this situation will continue to flow to the crypto market in the hope of protecting their capital from depreciation and inflation. In this case, bitcoin will continue to grow. There is also an opinion that everyone who wanted to buy bitcoin has already done so. The cryptocurrency is heavily overbought, so it is difficult for it to continue showing growth. There is no influx of new investors, and the forces of existing buyers and owners of "digital gold" are no longer enough to continue the growth of quotes. Plus, the current value of the "cue ball" - is high and already a very small number of new investors are ready to buy it at such a cost. The material has been provided by InstaForex Company - www.instaforex.com |
| Helpless bulls and the ban of the British bank HSBC to its customers to buy shares of MicroStrategy Posted: 11 Apr 2021 05:44 AM PDT
Yesterday, the bitcoin exchange rate rose to the level of $ 61,182 per coin. That is, it came close to its local and absolute maximum of $ 61,700. However, in the second half of the day, buyers again retreated from the market, thus, it was not possible to update the maximum value, as well as to gain a foothold above the psychological level of $ 60,000. Today, the quotes of the "cue ball" are growing again, but again, it is still unknown how the day will end. Perhaps, in the second half of the day, there will be a pullback down again. On the one hand, in our experience, when the quotes are long and tedious "trample" around one level, they eventually overcome it. Strong corrections or trend completions usually occur abruptly: reaching a certain level and a sharp reversal. However, this is bitcoin, where everything depends on the mood of investors, who bought the cryptocurrency to make money on it, that is, to sell it profitably sooner or later. Thus, if tomorrow the majority of participants in the cryptocurrency market decide that "it's time", then bitcoin can collapse at least by 90%. Of course, in 2021, it will be much more difficult to do this, since now a large number of institutional or simply large private investors have invested in bitcoin. Such people and companies can keep coins on their balance sheets for years. Therefore, we recommend starting from the support levels that are plotted in the illustration below. Meanwhile, the largest bank in the UK, HSBC, according to non-official information, prohibits its customers from buying shares in MicroStrategy. Recall that the company MicroStrategy, which is engaged in the development of analytical software, invested more than a billion dollars of free funds in bitcoin, buying more than 90,000 coins. Now the value of this number of coins is estimated at $ 5.5 billion. One of the bank's clients shared the relevant information. The letter, which they received at the end of March, says that the bank is changing its policy on cryptocurrencies and digital assets, as well as on companies that are closely associated with cryptocurrencies. It was also previously reported that HSBC also blocks transfers of customers who are associated with cryptocurrency exchanges. Thus, this is the first case in the world practice when a large bank tries not to popularize the cryptocurrency sector, providing its customers with more opportunities, but rather restricts access to digital products and shares of companies closely associated with them. However, from our point of view, there is nothing extremely surprising about this. Many experts now believe that if bitcoin collapses, then not only the cryptocurrency market will collapse, but also all other financial markets. Over the past year, bitcoin has integrated too deeply into the existing financial system, so its fall will affect the stock market, the debt market, and many other areas. Thus, some large banks may thus try to insure themselves against possible losses in the event of a bitcoin crash. Recall that earlier the quotes of the "cue ball" have twice lost up to 90% of the value after the upward trend.
Technically, nothing changes. At the moment, the quotes of the "cue ball" are near the level of $ 60,000, however, it will be possible to talk about fully overcoming it only tomorrow. All three levels of support (the red lines in the illustration) have not been overcome, so from a purely technical point of view, an upward movement is now most likely. Now, if the market participants manage to overcome $ 61,700, then the next target will be the resistance level of $ 65,408. The material has been provided by InstaForex Company - www.instaforex.com |
| What is next for Ripple's XRP? Posted: 11 Apr 2021 02:26 AM PDT XRP/USD has provided us a bullish signal after breaking the resistance of $1.06. This was noted in ourlast analysis with the cup and handle bullish pattern it had formed. Our target was $1.28-$1.33 and it has already been achieved and surpassed.
Red lines - Fibonacci targets Pink line - support As we mentioned last week, breaking on a weekly basis above $0.60-$0.80 resistance was big news. The upside explosion it followed has pushed prices to three year highs levels and we already have broken above the 161.8% Fibonacci target. Our next target is close to $2 and more specifically at $1.97. Upside potential remains huge in XRP/USD and looks like it is trying to cover for lost ground relative to the other cryptocurrencies. So far in the daily and intraday charts there is no sign of a reversal or of an important top. The material has been provided by InstaForex Company - www.instaforex.com |
| Bitcoin at major resistance close to providing new buy signal Posted: 11 Apr 2021 02:16 AM PDT Bitcoin was forming an inverted head and shoulders pattern as we explained in previous posts. Bulls need to break above the resistance at $59,000-$60,000 in order to activate the pattern. Yesterday price briefly broke out of resistance but soon after turned back below it. This false breakout is not a good sign.
Red rectangle - resistance BTC/USD is trying once again to break above the major resistance area in order to continue higher towards $65,000 and $75,000. Trend remains bullish as long as price is inside the blue upward sloping channel. Support is found at $56,00-$56,600. Bulls need to defend this price level otherwise we might see a change in short-term trend. The material has been provided by InstaForex Company - www.instaforex.com |
| Ethereum reaches our target from April 1st Posted: 11 Apr 2021 02:10 AM PDT On April 1st in our analysis we noted that our next target is $2,200 for Ethereum as price was recapturing $1,900. Yesterday price reached $1,197 just $3 from our target. Ethereum remains in bullish trend as price continues making higher highs and higher lows.
Red lines - Fibonacci targets ETH/USD is respecting the medium-term upward sloping black trend line. Price is bouncing off the trend line and is making new all time highs close to $2,200. There are some warning signs by the RSI as price is making new highs but the RSI is not. As long as price holds above the black trend line bulls will remain in control of the trend. Next upside Fibonacci target is at $2,600. However a pull back towards $1,900 should not be ruled out yet. The material has been provided by InstaForex Company - www.instaforex.com |
| Litcoin confirms our bullish setup and makes new higher highs Posted: 11 Apr 2021 02:03 AM PDT In our previous analysis we noted that the back test after the triangle breakout in LTC/USD would be a bullish sign if prices bounced off the upper triangle boundary. Price is now trading at $259 having broken the $244 high made after the triangle break out.
Red rectangle- back test Litecoin is making higher highs and higher lows. After the successful back test the chances for a move towards $300 have increased substantially. The entire crypto space is in bullish mode as prices continue to respect support levels. Price in LTC/USD has support at $216 and our closest target is at $286. Next target is at $332. As long as price is above $216 we remain in bullish momentum. The material has been provided by InstaForex Company - www.instaforex.com |
| GBP/USD. Preview of the new week. Inflation in America may rise to 2.5%-2.6% y/y. Posted: 11 Apr 2021 12:41 AM PDT
The British pound continues its steady decline as part of a correction against the upward trend that lasted for a year. The correction is still very weak, and there is no correlation between the euro/dollar and pound/dollar pairs at the moment. Thus, it is now extremely important to understand what factors affect both currency pairs. They are not the same. Based on the fundamental background, we have already said that it does not have any effect on the pairs at the moment. At the very least, it is extremely difficult to explain why the euro currency resumed its growth, while the pound sterling resumed its fall. We have already said that to justify such a development, we need either a positive fundamental background from the European Union or a negative one from the UK. However, the first condition is not met, and the negative fundamental background in the UK has been maintained for 4 years with small interruptions occurring from time to time. And it certainly hasn't changed dramatically in recent weeks. Thus, we conclude that both major currency pairs are now influenced by technical factors to a greater extent. As well as a "global fundamental factor", such as the increase in the US money supply. The "global fundamental factor" is a long-term factor, however, no one has canceled technical corrections. Therefore, it is likely that we are now seeing a banal technical correction for the pound. Next week will not be the most interesting in terms of macroeconomics. And the macroeconomic statistics themselves are often ignored. We have already said that macroeconomic reports are important in normal (peaceful and non-crisis) times when economies are in a stable state. Then each Nonfarm Payrolls report signals possible changes in this very economy. As well as reports on inflation, industrial production, and others. Now, the state of the economy depends not on Nonfarm Payrolls, but on when and how much money will be poured into it by the government or the central bank, and what other stimulus measures will be taken. Therefore, the statistics have been perceived very coolly by traders for more than a year. In the UK, the GDP figure will be published next week on Tuesday. According to experts' forecasts, by the end of February, the average three-month value of the indicator will decrease by 1.9%-2.0%. GDP for February will lose 8.3%-8.6% in annual terms. Thus, the British economy, which has recently been spoken of in positive terms continues to shrink. Yes, at the end of the 4th quarter of 2020, it managed to grow a little, despite the "lockdown". In the Foggy Albion this winter there were two "lockdowns", with long ones. Before the country began to show high rates of vaccination, it showed the highest rates of morbidity and mortality from the "coronavirus" in Europe. Thus, we do not understand the optimism of many analysts about the prospects for the British economy. The figures show the British economy is shrinking quite briskly. And thanks to the pandemic, and thanks to Brexit. By the way, forecasts for the final value of GDP for the first quarter in quarterly terms indicate a reduction of 2.6%. Also on Tuesday, industrial production in Britain for February will be published (a drop of 4.4%-4.8% in annual terms and an increase of 0.4%-0.5% in monthly terms is forecast) and the balance of trade in goods (negative, of course). This is all that is contained in the UK calendar for the next week. Now consider American publications and events. On Tuesday, the consumer price index for March will be published in the United States, and it seems that an information bomb is waiting for market participants here. According to forecasts, inflation in the United States will jump from 1.7% to 2.5%-2.6% y/y. Core inflation may rise from 1.3% to 1.6% y/y. If this happens, then, on the one hand, the target value that the Fed was aiming for will be reached, and on the other hand, such strong inflation, and most importantly its prospects for further acceleration, may already harm the US currency. Thus, this report can cause a reaction of the markets. On Thursday, the States will release reports on retail sales for March (forecast: + 4.5% - +5.5% m/m) and on industrial production for March with a forecast of +2.8% - +3.1% in monthly terms. On Friday, there will be no important publications overseas. Theoretically, all reports from America can affect the movement of the euro/dollar and pound/dollar pairs, although we only bet on the inflation report. However, during the publication of other reports, you should also exercise increased care and caution when trading. No one knows what the real values of the reports will be and how the markets will react to them.
Recommendations for the GBP/USD pair: The pound/dollar pair on the 4-hour timeframe has formed a new downward trend, which may also be short-term. Now, of course, it is not a "swing", but on the 24-hour timeframe, it is visible that the pair's quotes continue to jump up and down. Thus, we believe that the downward correction (for the long-term plan) will not last too long. Bears are too weak. It is best to use the hourly and lower timeframes in trading now, as they provide a clearer and more accurate technical picture. Explanation of illustrations: Price levels of support and resistance (resistance/support) – target levels when opening purchases or sales. You can place Take Profit levels near them. Ichimoku indicators, Bollinger Bands, MACD. The material has been provided by InstaForex Company - www.instaforex.com |
| EUR/USD. Preview of the new week. The euro currency is heading for 1.2092. Posted: 11 Apr 2021 12:24 AM PDT
As we said in previous articles, the euro/dollar pair is currently trying to resume the upward trend that began in March last year and was interrupted by a three-month correction in early 2021. From our point of view, despite the highest rate of recovery of the US economy, the US dollar will resume its decline, as the US money supply and the national debt of the country are inflated just before our eyes. Thus, on the one hand, we have high growth rates, and on the other – trillions of dollars are poured into the economy to maintain it. We have already said that if it were so easy and simple to stimulate the economy (without negative consequences), then all the countries of the world would constantly print money in unlimited quantities. The fact of the matter is that you can print money and pour it into the economy, however, how can you then withdraw it from there when inflation rises? By tightening monetary policy? However, the Fed is not going to raise the rate and reduce the volume of the quantitative stimulus program in the next couple of years. In general, all these trillions of dollars poured into the economy raises a very large number of questions and concerns about the economic future of the United States. For the euro/dollar currency pair, this factor can play a key role. Of the really important topics in the world that could theoretically have an impact on the euro/dollar pair, there is not much to highlight right now. There is a lot of news and topics, however, it is hardly possible to conclude that a possible tax increase in the United States in the future is now causing the dollar to fall. Or the low vaccination rates in the EU caused the euro to fall in the first three months. There are a lot of factors, they act at the same time, so it is impossible to say for sure why most traders sold euros for three months, and now they are buying it for dollars for a week. And, of course, the reason for this is not the growth in US government bond yields. The fundamental background may have nothing to do with it at all. As well as the macroeconomic one. With "macroeconomics" everything is clear. Think back to the Nonfarm Payrolls report a week ago and everything will become clear to you. It wasn't that there was no reaction, as traders didn't seem to have entered the market at all that day. On the following Monday, as many expected, there was also no testing of statistics. If you look at the 24-hour timeframe (especially on a small scale, so that the entire upward trend is visible), it becomes obvious that the downward movement in the last three months can be just a banal technical correction. Yes, the movement that lasted for 3 months (640 points from high to low) may simply be a technical correction, which was provoked by the closing of longs by traders, as well as a factor of temporary respite in cash injections into the US economy. Thus, now traders can resume selling the US currency, according to the general trend. And maybe even the actions of market participants will not be needed, since the US dollar may become cheaper simply because of the imbalance between the US and EU money supply due to the new trillions of dollars that will flow into the economy. Recall that recent research by Bloomberg showed that "under the pillows" of Americans is hidden about 1.5 trillion dollars. In European countries, this amount is much lower. And this money will also flow into the economy sooner or later, so it should also be taken into account. As for the macroeconomic statistics for next week. With a probability of 90%, most of the reports again will be ignored. Therefore, these data will only allow us to understand the overall economic situation. On Monday, the European Union will publish a retail sales indicator, which, according to forecasts, can add 1.2%-1.5% in monthly terms in February. However, we recall that in January this indicator decreased by 5.9% m/m. On Wednesday, the European Union will publish a report on industrial production for February, which may fall by 0.9%-3.2% compared to January. Also negative. Christine Lagarde and Luis de Guindos will also perform on this day. And on Friday, the final estimate of inflation in the European Union for March will be released. Recall that according to preliminary data, the main indicator of inflation increased to 1.3% y/y, and the base (excluding changes in food and fuel prices) - decreased from 1.1% y/y to 0.9% y/y. Since core inflation is not exactly more important, but it excludes the impact of volatile categories of goods, we can say that inflation in the EU is declining, in contrast to the expectations of the ECB and the European Commission. Recall that in recent years, the price of oil has increased significantly, so the growth of the main inflation to 1.3% can be exclusive "oil" in nature.
Trading recommendations for the EUR/USD pair: The technical picture of the EUR / USD pair on the 4-hour chart shows that an upward trend has been formed, however, this week there were almost no downward corrections. Moreover, from a fundamental point of view, it is quite difficult to explain the fall of the dollar. But we have already said above that, perhaps, the "foundation" did not have any influence at all, except for "global factors". Thus, next week it is recommended to trade for an increase while the price is located above the critical Kijun-sen line. The consolidation of quotes below this line can provoke a strong round of downward correction to the 18th level. Explanation of illustrations: Price levels of support and resistance (resistance/support) – target levels when opening purchases or sales. You can place Take Profit levels near them. Ichimoku indicators, Bollinger Bands, MACD. The material has been provided by InstaForex Company - www.instaforex.com |
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