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03.04.2020 01:32 PM
Analysis of EUR/USD on April 3, 2020

Waiting for Nonfarm Payrolls

Hello, dear colleagues!

The main event of today and the whole week will be data on the US labor market, which will be published at 13:30 London time. Economists' forecasts are disappointing. It is expected that the unemployment rate will rise from 3.5% immediately to 3.8%, and the growth of the average hourly wage will be the usual 0.2%. As for the creation of new jobs in non-agricultural sectors of the American economy, this indicator may fall to minus 100 for the first time since the financial and economic crisis of 2008.

In principle, market participants are well aware that in the context of the ongoing rampant COVID-19 around the world, strong data on the US labor market can not be expected. Interest is aroused by the actual figures and the reaction of investors to them. Has the coronavirus epidemic had such a significant impact on the economy of the United States of America, or will it be a little later? There will certainly be negative consequences for the world's leading economy. The question is when exactly to expect a peak?

So far, it is in the United States that the most severe outbreak of a new type of coronavirus is observed. The total number of deaths from COVID-19 is already about 1,170 people, but the peak has not yet been passed!

An alarming situation remains in a number of European countries. The number of people infected with the pandemic in Germany is growing very rapidly. To date, 84,794 people have been infected with coronavirus in Germany. By the way, this is more than it was at the height of the coronavirus in China!

Against this background, the eurozone economy, despite the measures taken by the ECB, is already declining by 9-10%. According to many authoritative experts, this is not the limit. As for employment, of all the countries in the currency bloc, the strongest decline is observed in Spain.

If you look at the charts of the EUR/USD currency pair, then after the growth showed a week earlier, the pair suffers significant losses at the current five-day trading session and is trading near 1.0810 at the time of writing.

Daily

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As you can see, following the results of yesterday's trading, the pair significantly declined and came down from the Ichimoku indicator cloud, breaking through the Tenkan line and the strong technical level of 1.0887. Today, at the moment of writing this article, the single European currency continues to be under pressure.

Extremely negative data on the US labor market and the same negative reaction against the US currency of market participants can correct the situation for the euro bulls. If the labor statistics from the States turn out to be worse than the forecast values, the Euro/dollar will have strong arguments to reduce the losses that the pair is currently suffering.

Closing today's and weekly trades below the landmark level of 1.0800 will indicate further bearish prospects for the instrument. If the euro bulls manage to take advantage of frankly bad statistics from the US and return the price to the limits of the Ichimoku cloud, it will be possible to stabilize the situation and suspend the current downward dynamics. Otherwise, EUR/USD risks falling to the area of 1.0635, where the minimum trading values of the previous month were shown.

H1

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The technical picture on the hourly chart suggests considering sales after a pullback to the broken level of 1.0887, just above which the 50 simple moving average is located. Above, the opening of short positions in the euro is worth looking at from the area of 1.0910-10940, where there are 89 and 200 exponential moving averages.

I hope that I will post more specific and substantiated trading ideas on Monday, taking into account the factor of closing the current weekly trading. Yes, and I would not recommend moving open positions to Monday. If possible, it is better to close them and delete all pending orders from whom they are placed.

Have a nice weekend!

Ivan Aleksandrov,
Analytical expert of InstaForex
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