The new trading week promises to give traders the information they need to finally make a more or less clear conclusion. What specific cuts are waiting for each of the economies we are interested in? This week, official data on macroeconomic indicators for March will finally begin to arrive from the UK, the European Union and the United States. What can I say as a preliminary word? First, we are still not sure that market participants will pay attention to any statistics. Thus, most or all of the statistics can be ignored. Second, it is not clear what the real changes in each economy will be. We could see this from the forecasts of business activity indices last week and apotheosis - applications for unemployment benefits in the United States, the number of which was predicted at one million, but in fact it turned out to be 3.3 million. Thus, it is unclear whether market participants will be impressed by the discrepancies between forecasts and actual figures. However, we can definitely say that macroeconomic statistics will arouse interest.
We'll start on Monday. On this day, the most interesting reports will be published in Germany. More precisely, one report. Inflation in the preliminary value for March. The consumer price index is expected to slow to 1.4% yoy from 1.7%. Spain will also publish an inflation indicator. Based on experts' forecasts, the indicator will decrease from 0.7% yoy to 0.5%. And from our point of view, these are still optimistic forecasts. Several secondary indicators will be released from the European Union today, such as the level of consumer confidence and the index of sentiment in the economy, which did not cause any reaction from the market even in quiet times.
The preliminary value of inflation for March in the European Union will be published on Tuesday, which should fall to 0.7% per annum from the current +1.2%, as well as more important indicators of the unemployment rate in Germany for March with forecasts of growth from 5% to 5.2% and the number of applications for unemployment benefits with a forecast of 28 to 34 thousand. We believe that these forecasts are too optimistic and the real figures will be much worse.
Wednesday will be quite an interesting day, but most indicators can already be easily predicted. On this day, business activity indices in the manufacturing sectors of the EU and separately Spain, Italy, Germany, France and the UK will be published. Most likely, they will not differ too much from the preliminary values that were published last week. Thus, we are only waiting for a small reduction in business activity in production. The unemployment rate in the European Union is forecast to remain unchanged in February at 7.4%. However, this is in February...
Everything will be relatively calm on Thursday, since only the publication of the EU producer price index will be released on this day, which almost never causes any reaction from the markets.
Business activity in the service sectors for March in Germany, Italy, Spain, France and the EU will be published on Friday, which is likely to fall to completely indecent values, as well as retail sales in the European Union for February.
What can I say about this week's European news package? In principle, no surprises are expected. Approximate values of business activity in various sectors are already known. All data related to February will not arouse any interest among traders. Thus, the most interesting reports will be German unemployment data for March. It is based on this report and the number of applications for benefits that we will be able to get an approximate picture of what is happening in the EU countries. We believe that the picture may strongly disappoint market participants. We have not listed in this article all the reports scheduled for release in the United States this week, they will be covered in the article "Preview of the GBP/USD pair". However, looking ahead, we can say that the greatest attention will be focused on macroeconomic statistics from overseas. In addition, there are a lot of different interesting processes going on in the United States, and there is Donald Trump, who even during the epidemic remains the main newsmaker in the world, regularly distributing comments on absolutely different issues and expressing his opinion on the topic of the epidemic in the world. We have already discussed Trump's opinion regarding the quarantine measures in the United States. Thus, one of the main intrigues now is whether the president will actually be able to lift the quarantine. Or will he try to do this? And if he does, what kind of resistance will the Democrats face? After all, the presidential seat is at stake now (elections in November this year), and the health of the US nation, and the American economy, which can significantly suffer, given the number of patients with coronavirus and the increase in their number exponentially. In general, we believe that all the most interesting things will happen in the United States.
Recommendations for the EUR/USD pair:
Based on the listed fundamental data, we believe that the influence of the fundamental background will not be too strong. Thus, more attention should still be paid specifically to the technical picture of 4-hour timeframes. For both trading systems that we represent, longs are now relevant with targets around 1.1230 and 1.1307, but there are no signs of the beginning of a corrective movement.
