4-hour timeframe
Technical details:
Higher linear regression channel: direction - down.
Lowe linear regression channel: downward direction.
Moving average (20; smoothed) - down.
CCI: -87.1604
If you close your eyes to the completely crazy last month and a half in the currency market and only consider the trading on Monday, it may even seem that there is no crisis, epidemic and recession in the world. The euro/dollar currency pair moved so calmly and easily. The volatility was only 68 points, first the pair went up and then down, thus fully corresponding to the nature of the fundamental and macroeconomic background on Monday, April 6. And both backgrounds were simply not there on Monday. There was no macroeconomic background, and no more or less significant publications for the day. The fundamental background is the same. No high-profile speeches by top officials of the European Union and the United States. Moreover, traders have been completely unresponsive to any macroeconomic information that comes to their disposal for a month and a half. At what absolutely any. Thus, by and large, trading is now quite simple, since it makes sense to take into account only technical factors. Trends are easy to follow, reversals are quite smooth, and fast indicators, like Heiken Ashi, react in time to everything that happens. The only thing that marred such a convenient time for trading was volatility. The pair went through 200-400 points every day, which simply frightened average traders who are not ready to work with a tool that goes the same distance in a day as it did a month ago. Thus, we can even assume that over the past month and a half, the market has mostly been made by major players. Large banks, financial conglomerates and syndicates, large manufacturing companies, and so on. The share of private traders, of course, was also present, but it was definitely lower than before the crisis. Now, when the volatility slowly returns to normal, it returns a convenient time for ordinary traders. If during almost all of 2019, we have repeatedly said that the balance of power between the United States and the EU, between the Fed and the ECB, is clearly led by the Americans. In other words, we analyzed all the macroeconomic indicators and monetary policies and concluded that the dollar will become more expensive. Now, no such conclusions can be made simply. We have received quite a lot of important information from overseas regarding the labor market. All market participants realized that unemployment and the labor market are now a headache for Congress and the Fed. Unemployment and a weak labor market will pull the US economy down at the moment. However, what about Europe? Is it ever better in the EU than in the US? We believe not. The EU does not publish data similar to NonFarm Payrolls, there is no ADP report, and there are no weekly reports on benefits applications. There are only official unemployment rates. Thus, we believe that the unemployment situation is no better in the EU, since it has the same quarantine as in the United States, and the epidemic is no smaller. Based on this, and also taking into account the Fed's key rate cut to almost zero, we believe that now the euro and the dollar are in almost the same conditions. If you carefully consider the movement of the euro/dollar over the past month, it becomes obvious: at the moment, quotes have returned exactly to the place where the strongest growth began a month and a half ago. Thus, nothing has changed in the balance of power between the euro and the dollar over the past month and a half.
Meanwhile, the EU decided after almost two months to respond to the US for their expansion of duties on imports of steel and aluminum, which were introduced by Donald Trump on February 8. According to the European Commission, the list of goods from the United States that will be subject to duties is limited. Representatives of the EU believe that in the context of a global pandemic, partners should cancel their "unfair" duties, in particular on aluminum and steel. Since this did not happen, the EU introduces duties that will apply to lighters, furniture fittings and some other groups of goods.
At the same time, European Commission chief Ursula von der Leyen said: "We need a Marshall plan for Europe. It is necessary to invest billions of euros today to prevent a disaster in the future." Naturally, we are talking about investing in the European economy to prevent its collapse as a result of the coronavirus epidemic. The head of the European Commission believes that the EU budget for 2021-2027 should be revised, as economic and social conditions have changed. All EU countries, according to Ursula von der Leyen, should show solidarity on this issue.
From a technical point of view, the downward movement has every chance of resuming, since the upward correction has not started, and the Heiken Ashi indicator has colored the last bars purple. However, firstly, there is now a high probability of a flat, since the price has returned to its original positions a month and a half ago, and the macroeconomic background is now absent, and, secondly, we still believe that the correction against correction option is relevant. It is in the area of the 1.08 level that we believe there will be an upward reversal with a further upward movement from the 1.10 area. As before, we advise not trying to guess the reversal of the pair, but trading strictly on the trend. No important macroeconomic publications are scheduled for April 7.
The volatility of the EUR/USD currency pair remains at rather high values, but at the same time continues to decline every day. As of April 7, the average volatility is 113 points. We believe that markets continue to rebound at a slow pace. Today we expect a further decrease in volatility and price movement between the levels of 1.0687 and 1.0913. There is a flat at the beginning of the trading week, so in fact the volatility channel can be much narrower.
Nearest support levels:
S1 - 1.0742
S2 - 1.0620
S3 - 1,0498
The nearest resistance levels:
R1 - 1,0864
R2 - 1.0986
R3 - 1,1108
Trading recommendations:
The EUR/USD pair maintains the downward trend. Thus, it is advised that traders either remain in euro-currency sales with the goals of 1.0742 and 1.0687, or wait for new signals for selling, since the Heiken Ashi indicator has already been turning up, indicating a correction. It is advised to buy the pair before traders reverse consolidate above the moving average line with the first goal of the Murray level "2/8" - 1.0986.
*这里的市场分析是为了增加您对市场的了解，而不是给出交易的指示。
InstaSpot分析评论将让您充分了解市场趋势！ 作为InstaSpot的客户，您将获得大量的免费服务以实现有效的交易。
