Hello, colleagues!
At the auction on March 9-13, all major competitors declined against the US dollar. At the same time, the single European currency showed a minimal decline. This is described in more detail in the technical part of this article, and I will start with the topic of the ill-fated coronavirus.
The COVID-19 epidemic continues its deadly march around the world. The virus has already spread to more than 140 countries, including Russia. Unprecedented measures are being taken to prevent further spread of the disease. Borders between states are being closed, mass events are canceled one by one, where the number of participants should not exceed 500 people. From the shelves of European supermarkets, essential goods are rapidly being swept away: hygiene products, canned food, water. The already panicked mood is reinforced by calls from the authorities of various European states to their citizens, without an urgent need not to leave their homes and apartments.
Sports competitions, in particular football championships, are being canceled, and Euro 2020 may be postponed to next year. A decision on this issue will be made tomorrow, March 17.
It became known that there will be no parishioners at the Easter service in the Vatican, the reason is still the same — an epidemic of coronavirus, the infection of which has already been noted in the Vatican.
Naturally, the current situation with the COVID-19 pandemic has a very negative impact on the world economy and increases the likelihood of a new economic crisis comparable to that of 2008-2009.
US President Donald Trump intends to allocate $50 billion to fight the coronavirus. The EU has promised to allocate even more funds to help all its members. Unfortunately, in this issue, money can not solve everything. However, support is certainly needed, and no one wants a new financial and economic crisis.
Since today’s calendar does not shine with an abundance of important macroeconomic events, we will immediately proceed to the technical analysis of the main currency pair of the Forex market.
Weekly
As expected, the auction of the current five-day period opened with a price gap up, which was quickly closed.
Although last week’s candle is the most bearish. The closing price is below 89 EMA, the middle of the previous candle body, the lower border of the Ichimoku indicator cloud, the Kijun line, and 50 simple moving average. It would seem that after the closing of the bullish gap, the euro/dollar will continue the downward dynamics that took place a week earlier. However, this was not the case.
We have to admit that in the current situation with coronavirus infection, the market, as in life, is in chaos and confusion. Either the US dollar is a protective asset and is in demand, or, on the contrary, it falls under a wave of sales.
If by technique, the pair has come to the falsely broken resistance of 1.1238 and is trying to return above this mark. It should be noted that in addition to the level itself, 89 exponents provide active resistance.
However, even the passage of 1.1238 and 89 EMA does not promise an easy life for the euro bulls. Above is a strong technical level of 1.1355, the upper limit of the Ichimoku cloud, 200 EMA and last week’s highs at 1.1494. Players on the rise have something to strive for, and solving problems will not be easy.
As for the bearish scenario, sellers need to bring the price down again from the Ichimoku indicator cloud, passing 50 MA and Kijun on the decline and then re-test the support at 1.1055 for a breakdown. In my opinion, the further direction of the pair will depend on whether this level of pressure will withstand or not, at least in the weekly cycle.
Daily
This is a very interesting and revealing situation. The pair declined, flooded the gap, and then, finding support on the upper border of the Ichimoku cloud and 200 EMA, rushed up.
However, near 1.1238, the quote met strong resistance, and at the end of the review, it bounced to 1.1207. If the euro bulls manage to raise the rate not only above 1.1238 but also the Tenkan line (1.1275), closing the auction above it, further progress in the north direction will get good prospects. If the daily session falls and closes below 200 EMA (1.1115), a bearish scenario is most likely.
I think that today it is better to observe what is happening and not open new positions. The situation is too uncertain. We will see how today’s trading ends, and tomorrow we will try to determine the further direction and entry points.
Have a nice day!
The material has been provided by InstaForex Company – www.instaforex.com
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