4-hour timeframe
Average volatility over the past 5 days: 153p (high).
The EUR/USD pair ends the fourth trading day of the week with continuing the downward movement, which began at the beginning of the week. In the last month and a half, we regularly talked about the fact that individual fundamental and macroeconomic factors now have no effect on the movement of currency pairs. It was very true, since the US stock market initially fell, then recovered, oil prices dropped to twenty-year lows, the Federal Reserve, coupled with the US government, poured several trillion dollars into the economy, the US regulator also lowered rates to zero, announced several programs of quantitative easing, and along with the desire to give out dollar loans to the whole world, to any central bank. And none of these events served as a reversal for the euro/dollar pair. All this time the EUR/USD pair traded according to its own rules, and traders made decisions solely on their own grounds. When traders began to receive macroeconomic information for March, we assumed that now they can finally start paying attention to it. Since these statistics were already related to a new period, the pandemic period, when the coronavirus was already rampant both in Europe and in the United States, having a direct impact on the economy. At first, even some reports coincided with the direction of the EUR/USD pair. For example, the report on applications for unemployment benefits a week ago. However, at the same time, the correlation between the pound-dollar and euro-dollar pairs broke down and the volatility of both instruments began to fall synchronously. That is, the markets, in fact, began to calm down, began to trade much less actively, despite the fact that the epidemic continued to spread around the world at an exponential pace. It turns out that, indeed, initially there was a panic in all markets, including the currency market, it probably lasted for 7-10 days. All the movements that we saw later were corrections. And now we are seeing a correction against a correction for the euro/dollar currency pair. We came to this conclusion thanks to a single report that was published today. This report is the US unemployment benefit applications for the week of March 27. If a week earlier there were 3.3 million applications with forecasts of about 1 million, now there was a value of 6.7 million applications with a forecast of 3.5 million. At the same time, the US dollar paired with the euro currency is growing steadily during the penultimate trading day of the week. Thus, the conclusion, from our point of view, is obvious - traders continue to work exclusively on technique. Probably, in the near future, the euro will also find the "equinox point" and calm down completely, as it has happened with the pound in recent days.
It makes no sense to review other macroeconomic events of the day. Especially since there were no important ones among them. Meanwhile, despite the fact that the US president seems to have abandoned the idea of ending the quarantine in the United States ahead of time and expelling Americans to work, as he realized the threat posed by the COVID-2019 virus, it seems that he might still promote this idea in the future. For example, today US President Donald Trump, who is still the main newsmaker in the world, said that the spread of the coronavirus in the US can lead to an increase in suicide, domestic violence and drug use. According to Trump, "the country should return to normal life as soon as possible." Trump also linked the possible increase in suicide with the loss of work by Americans. Although it seems like the country is taking care of those who lost their jobs, especially in such a difficult time. "We want to open as soon as possible. Then I will become the happiest person," Trump summed up.
However, there is also good news from the American President. Trump said that Saudi Arabia and Russia intend to conclude a truce and end the oil war. According to Trump, in the next few days, Saudi Arabia and Russia will conclude a deal to end the price war in the oil market, which, in fact, is not profitable for anyone, and at present only adds extra nervousness to all participants in all markets. Thus, Trump can count on a decrease in oil production and an increase in prices for all grades, including shale. "The oil industry is ruined all over the world. This is bad for Russia, this is bad for Saudi Arabia. This is very bad for both countries. I think they will make a deal," the US leader said, forgetting to mention that low oil prices are also unprofitable for the United States themselves. After all, shale oil produced by American companies is one of the most expensive at cost. Thus, the first one who suffers bankruptcy will be American oil producers. If the deal between Russia and Saudi Arabia takes place, it will really remove some of the tension from the world's commodity markets.
4-hour timeframe
Average volatility over the past 5 days: 249p (high).
The GBP/USD pair continues to be in full calm on April 2. Trend movement is absent as such. The trading day volatility is only 123 points and has been steadily falling in the last four days. Market participants are finally starting to move away from the last, completely crazy, month, so perhaps in the near future trading on the foreign exchange market will return to normal. Today, even a completely failed report on applications for unemployment benefits in the United States was unable to move the pound/dollar pair off the ground. No important information was published in the UK today. As for the coronavirus, there is no positive news. The total number of those infected with the "Chinese virus" is already 962,000, almost 220,000 have been recorded in the United States and 34,000 in Britain. Trump has already stated that the peak of the epidemic will take place in two weeks, and the total number of deaths from a pandemic can reach 200,000 Americans. Thus, there are simply no positive forecasts and news. The economy continues to slow down, only vital enterprises work, all the rest are in quarantine. China is starting to come to life, but experts say that a second wave of the epidemic could begin in this country. Moreover, the United States accuses China of deliberately underestimating the number of people infected and killed by coronavirus in Beijing. It is possible that other countries are doing this. What is really going on in China, one can only guess.
Recommendations for EUR/USD:
For short positions:
The EUR/USD pair continues to move down and overcome the Ichimoku cloud on the 4-hour timeframe. Thus, it is now recommended that you stay in euro sales with targets at levels 1.0799 and 1.0781 until you turn the MACD up or bounce off any target.
For long positions:
It is recommended to buy the EUR/USD pair not before the price is consolidated above the Kijun-sen line, which will indicate the resumption of an upward trend. The first goal is the volatility level of 1.1087.
Recommendations for GBP/USD:
For long positions:
The pound/dollar is now in absolute flat. Thus, it is recommended to buy the British currency with targets at levels 1.2655 and 1.2809 only after the resumption of an upward trend, which can be signaled, for example, by the Bollinger Bands indicator.
For short positions:
You will not be able to sell the GBP/USD pair until the price is consolidated below the critical line and the Bollinger bands are extended downwards.
