4-hour timeframe
Average volatility over the past five days: 160p (high).
The EUR/USD pair ends the second trading day of the week with the continuation of the downward correction, which began the day before. At the moment, the pair has worked out the critical Kijun-sen line, so there are two possible scenarios for the near future. First: overcoming the Kijun-sen line and further pulling down the quotes of the euro/dollar pair. The second (more likely): a rebound from the Kijun-sen line, and at the same time from the stronger Senkou Span B line, which has also been worked out at the moment. The first scenario will make it possible to count on a new round of appreciation of the US currency, the second - on the resumption of an upward trend that has formed after March 20. It is not known which option is more likely from a fundamental point of view. We have repeatedly said that there are a huge number of fundamental factors that, in theory, can influence the behavior of traders. However, this huge amount, in fact, has the same significance as if none of the fundamental factors now affects the movement of the pair. When there are more than five factors and each one is constantly increasing, then weakening, it is impossible to predict which and when will provoke a new movement. Thus, as before, we recommend that close attention be paid to the technical picture - as the most neutral and informative at this time.
Today, March 31, Germany published relatively important unemployment data for March. It turned out that the main unemployment rate at the end of March did not change compared to February and reached the same 5%. Also, we can say that the indicator of changes in the number of unemployed compared to the previous month, which showed an increase of only one thousand, instead of the predicted 30-35 thousand. However, as we can all see, the euro continued to lose positions against the US dollar during the day. So once again, we can conclude that macroeconomic statistics had almost no impact on the pair's movement at this time. In addition to unemployment in Germany, European Union inflation data for March was also published today. So far, preliminary data. The core consumer price index (excluding highly volatile commodity groups such as energy and food) slowed to 1.0%, while the main inflation indicator fell to 0.7% in annual terms. For the eurozone, this news is, of course, sad and disappointing, but what else could traders expect from the month of March, given all the events related to the epidemic in the world, and separately in Europe? We believe that all macroeconomic statistics in the United States and the EU will only get worse in the coming months. Question: how much will it deteriorate? So far, the indexes of business activity in the service sector have been really disappointing to a high degree. Both in the US and the EU. As well as applications for unemployment benefits in the United States. Other indicators are published at more or less decent levels.
Meanwhile, the total number of cases of coronavirus in the world exceeded 800,000. In the United States, 165,000 cases of the COVID-2019 virus were recorded, while in Italy, the closest to it, there were 102,000 cases. As we can see, the total number of cases in the EU is much higher than overseas. The sum of the victims of four countries (Italy, Spain, Germany and France) is about 320,000. Almost twice as much as in much larger America. However, the epidemic is growing at the highest rate in the US. The highest death rate from the virus in Italy, with the virus taking about one in ten lives. For example,, the death rate from the virus is no more than 1% in Germany or Switzerland. US President Donald Trump once again announced that the rules of social distancing will be extended until the end of April, and may also be tightened. "Based on the simulation, we can conclude that the peak of the pandemic will not come in the next two weeks," Trump said. The US president also said that more than a million tests for coronavirus were conducted in the country. "The number of tests was incredible. Each of us has a role to play in defeating the epidemic," Trump said.
4-hour timeframe
Average volatility over the past five days: 310p (high).
The GBP/USD pair has been in a 200-point flat for two consecutive days and almost froze in one place. This, of course, is sarcasm, since the volatility of 200 points cannot be called being in one place, but, based on the illustration, this is the impression. The pound quotes slightly fell at the beginning of the day, and has slightly increased during the US session. On the whole, we cannot ascertain either the beginning of a downward correction or the resumption of an upward trend. Gross Domestic Product data for the fourth quarter was released in the UK, which, however, did not really interest anyone. As we have already said, statistics, especially for the period up to March 2020, do not particularly concern market participants. GDP was +1.1% in annual terms, and 0% in monthly terms. Commercial investments grew in the fourth quarter by 1.8% in annual terms and decreased by 0.5% in monthly terms. There are no important economic news from overseas today. One of the main stories of the day in the British media was the recovery of Prince Charles from the coronavirus. The prince was quarantined for seven days and had already left the limits of self-isolation in his mansion in Scotland. In total, in Great Britain at the moment 22.5 thousand inhabitants are considered infected, 1400 - deaths.
Recommendations for EUR/USD:
For long positions:
The euro/dollar pair may complete the correction near the Kijun-sen line on the 4-hour timeframe. Thus, it is advised to buy the euro in case quotes rebound from the Kijun-sen line with the target of a volatility level of 1.1192.
For short positions:
It will be possible to sell the EUR/USD pair no earlier than consolidating the price below the important lines of Senkou Span B and Kijun-sen. The first goal is the support level of 1.0799. It is better to consider shorts in this case in small lots.
Recommendations for GBP/USD:
For long positions:
The pound/dollar pair is currently trying to resume the upward movement. Thus, it is recommended to buy the British pound with the goal of a volatility level of 1.2698 after the MACD indicator turns up or, conversely, to remain in longs until a more eloquent correction signal.
For short positions:
It will be possible to sell the GBP/USD pair not earlier than when the bears overcome the critical line with the first goal - the support level of 1.1771 - and small lots, since the price will be inside the Ichimoku cloud at this time.
