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Judging by the statistics of morbidity, the epidemic of the coronavirus is on the decline. The number of new infections is declining day by day. Perhaps the world really has passed the peak of the epidemic. At least the stock markets have already believed in this, and the indices confidently went up. But the foreign exchange market froze on the spot. This is especially evident in the pound. It slightly left yesterday amid reports of a deterioration in the health of Boris Johnson, who was diagnosed with coronavirus. The British prime minister is in serious condition. Nevertheless, at the end of the day, the pound stood still. The currency does not yet understand where it should go and what awaits in the future.
However, the meager macroeconomic data that was published yesterday rather indicates that the pound will have to continue its decline against the dollar. For example, the index of business activity in the construction sector fell from 52.6 to 39.3. We expected a decline to only 46.0. And we are talking about construction, which is directly related to the real estate market, which is traditionally perceived as the main criterion for determining the investment attractiveness of the British economy. After all, construction and real estate transactions account for at least a fifth of the United Kingdom's GDP. At the same time, construction itself is still directly connected with industrial production. So the recovery of the industry will have to wait a little longer. In addition, the rate of decline in new car sales accelerated from -2.9% to -44.4%. Simply put, the UK car market has almost halved. Naturally, all this does not add faith in the future.
Index of business activity in the construction sector (great Britain):
Today, the UK is set to data on house prices from Halifax, the growth rate of which, should accelerate from 2.8% to 3.0% in March. Strangely, nationwide's data also showed an acceleration in the rate of growth in real estate prices for March. In some incomprehensible way, but in spite of the epidemic of the coronavirus, housing prices in Britain are rising. But this is really just a statistical quirk. It happens. Just in March last year, housing prices either did not grow at all, or fell. And they were going down. And oddly enough, prices should still drop by 0.1% on a monthly basis. This is a seasonal, strictly British factor. In March, housing prices are falling in comparison with the previous month. Well, the growth in annual terms is due to the rapid growth in housing prices at the end of last year.
Halifax house price index (UK):
In the United States, JOLTS data on open vacancies are published today, which will only be another illustration of the nightmare that the American labor market has found itself in. The number of these most open vacancies should be reduced from 7.0 million to 5.6 million This will once again confirm fears that the sharp increase in the army of unemployed in the United States is serious and lasting. People will not be able to find a new job so quickly. This means that the economic consequences will be very severe.
Open jobs JOLTS (United States):
In terms of technical analysis, we see a characteristic sideways movement of 1.2270/1.2480, during which the lower boundary was broken locally. In fact, according to the results of a short fluctuation, the quote returned to the framework of the same flat, having turbulence within the lower boundary.
Looking at the trading chart in general terms, we see an upward inertia move from record lows, during which a slowdown was formed.
We can assume a temporary fluctuation within the values of 1.2250/1.2325, where we should consider the price taking points relative to the specified frames, working on their breakout.
We will concretize all of the above into trading signals:
- We consider long positions in case of price taking higher than 1.2325, with the prospect of a move to 1.2350-1.2385.
- We consider short positions in case of price taking lower than 1.2250, with the prospect of a move to 1.2150.
From the point of view of a comprehensive indicator analysis, we see that due to the preservation of a characteristic flat, the indicators of technical instruments have a versatile signal. It is worth considering that until the 1.2150 mark is broken, the daily periods will signal a purchase.
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