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Hello, dear colleagues!
The topic of coronavirus continues to be the focus of the attention of the entire world community. The number of people infected by the insidious epidemic in the world is approaching one million, while the number of deaths from COVID-19 is inexorably growing to almost 50,000 people.
Against this background, the European Union is discussing measures to support the economy. One of the main options may be the ESM mechanism, the essence of which is to provide loans in the amount of 2% of the eurozone's GDP for any country that is part of the currency bloc and needs to provide a credit line. European officials will have to work out a package of measures to counter the pandemic by April 9.
In the United States, COVID-19 also continues to gain momentum, the number of infected people and deaths are inexorably increasing, and the American leader Donald Trump informed citizens about the upcoming strict measures to counter the epidemic.
Meanwhile, the US currency is again in high demand as the most liquid asset. However, the strengthening of the US dollar in yesterday's trading was quite restrained. Investors may be waiting for Friday's data on the US labor market, which will be published at 13:30 (London time).
If we go back to yesterday's macroeconomic reports, the unemployment rate in the eurozone fell quite unexpectedly to 7.3%, although forecasts suggested that the indicator would remain at 7.4%. However, this did not support the single European currency, which declined against the US dollar at the end of trading on April 1.
In addition to the withdrawal of market participants to liquidity, the "American" was supported by data from ADP on changes in the number of employees. The indicator significantly exceeded the experts' expectations (the forecast is minus 150, in fact minus 27). Let me remind you that the change in the number of employees from ADP is perceived by investors as a leading indicator of the official data, which will be published on Friday. However, Nonfarm Payrolls do not always match good reports from ADP and vice versa.
Today's economic calendar includes the eurozone producer price index, as well as US data on the trade balance and production orders.
I do not think that today's statistics can significantly affect the price dynamics of EUR/USD, especially on the eve of the publication of the main reports on the US labor market.
Daily
As you can see, after the decline to 1.0902, the pair managed to reduce losses, and Wednesday's trading ended at 1.0961. As expected, the price was supported by the Tenkan line and the lower border of the Ichimoku indicator cloud. However, bearish sentiment for EUR/USD does not weaken and at the time of writing this article, the pair is declining, trading near 1.0920.
If the downside players are able to push the quote below 1.0887, break through the Tenkan, and close trading under the lower border of the cloud, the probability of continuing the downward dynamics will increase significantly. Although, in my deep belief, everything will be decided after tomorrow's publication of data on the US labor market.
H4
The picture on the 4-hour timeframe is very similar to the course reversal in the south direction. However, it is happening very slowly, apparently, the expectations of tomorrow's data from the US are affected.
For a while, the 50 simple moving average could provide support, but at the end of the review, this moving is breaking through. If the pair is fixed at 50 MA, then you can try selling EUR/USD on the pullback to the area of 1.0930-1.0975. You should look for more attractive prices for opening short positions after rising to a strong technical and psychological level of 1.1000.
At the moment, in the conditions of large-scale strengthening of the US currency, the main trading idea for EUR/USD is sales.
Successful trading!
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