18.03.202008:39 Forex Analysis & Reviews: Hot forecast for EUR/USD on 03/18/2020 and trading recommendation

It seems that the dollar cannot be stopped, and it takes some miracle to change the direction of its movement . But while the world continues to panic over the coronavirus, which has become the reason for the mass flight of capital to the United States, the trend is unlikely to change. And what is happening is really capital flight.

However, even if we put aside the general hysteria, the dollar had a reason to grow. Maybe not on this scale, but still. So the panic only increased the movement to strengthen the dollar. The fact is that industrial production, which has declined for five consecutive months, instead of continuing to fall, unexpectedly remained unchanged. However, the previous value was revised from -0.8% to -1.0%. But in any case, we do not see a further decrease, but the absence of both decline and growth. And it is certainly better. In addition, although there is a slowdown in retail sales growth from 5.0% to 4.3%, the data still turned out to be better than the 2.7% forecast. So, yes, the dollar had a reason to strengthen, but the information panic fuelled it.

Industrial production (United States):

The panic continues, and it is likely that it will only get worse in the near future. Moreover, even without it, the single European currency has enough reasons to weaken. For example, data on inflation is set to be released today, which should show its decline from 1.4% to 1.2%. However, if we recall recent data on the largest countries in the eurozone, to which Germany and France were the only ones that coincided with forecasts, while it was worse in Italy and Spain, there is every reason to believe that inflation will slightly fall even more. And the fact that inflation is falling is a sufficient reason for the weakening of the single European currency.

Inflation (Europe):

At the same time, the panic that rather simply accompanies capital flight to the United States will allow the market to ignore weak macroeconomic data in America itself. The number of issued construction permits in the United States is expected to decrease from 1,550 thousand to 1,498 thousand. In addition, the number of started construction projects should be reduced. from 1,567 thousand to 1,495 thousand. And if there were no panic due to the coronavirus, we would see how these data somewhat slow down the strengthening of the dollar amid lower inflation in Europe. But we won't see that today.

Number of construction permits issued (United States):

From the point of view of technical analysis, we see a rapid downward move, which led the quote to the 1.0955 area, where a stagnation was formed amid local oversold conditions, followed by a pullback above the 1.1000 level. In fact, the downward interest has become relevant again, where the quote has a stable inertia against the background of external noise.

In terms of the general review of the trading schedule, we see that the quote managed to fall by 498 points for six trading days, where working out more than 65% has been recorded relative to the earlier inertia move.

It is likely to assume that the existing pullback will soon be replaced by another downward move, where speculative activity will continue to grow on the external background. The primary outlook is around the last day's low of 1.0955. The main positions will go after consolidating the price below 1.0950.

From the point of view of a comprehensive indicator analysis, we see that the hourly and daily periods still maintain a downward interest against the general background of the market. While minute intervals work on a local rebound.