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For almost a whole day, the single European currency literally stands still, as investors are not ready to take risks, and prefer to wait for data on retail sales and industrial production in the United States. It is around this data that all events will develop. At least not today and maybe for the whole week. It is quite possible that their character will set the tone for trading until they close on Friday. After all, the growth rate of retail sales should slow down from 7.4% to 5.5%. This means that events in the United States are developing according to the European scenario, when after a sharp increase in inflation, there was literally a collapse in consumer activity. However, in Europe, sales went into negative territory while in the United States only a slowdown in growth is expected. Moreover, growth should still remain at a fairly high pace. So it is unlikely that the dollar will immediately begin to rapidly lose its position against the single European currency. In addition, it will be supported by data on industrial production, the rate of decline of which is -1.8% should be replaced by growth of 0.9%. And if we also take into account that the last time the industry showed growth as much as in August 2019, then do not underestimate the optimism with which investors can perceive information about its growth. Nevertheless, retail sales have a much greater weight, and their noticeable slowdown especially immediately after a sharp increase in inflation will certainly have a negative impact on the dollar's position.
Retail Sales (United States):
The EUR/USD currency pair did not show proper activity during the past day, which resulted in an amplitude move in the range of 1.1910/1.1940. An interesting point is the fact that the quote repeats the support point of 1.1910 with surgical accuracy, which reflects the local minimum of March 12.
Market volatility has a low level, which is confirmed in the market by the stagnation of the quotation.
If we proceed from the current location of the price, then we have all the same amplitude fluctuation in the range of 1.1910/1.1940, where market participants are concentrated near the upper frame.
Looking at the trading chart in general terms, the daily period, it is clear that the quote without any changes follows in the structure of the correction course from the maximum of the medium-term trend of 1.2349 --> 1.1835.
In this situation, we can assume that the amplitude of the price movement in the range of 1.1910/1.1940 will not last long in the market and speculation will soon arise, which will lead to impulsive price changes.
Trading tactics are chosen based on the method of breaking a particular border, working on the outgoing momentum.
Concretizing all of the above into trading signals:
- Long positions, we consider in the case of fixing the price higher than 1.1945 with the prospect of a move to 1.1960.
- Short positions, we consider in the case of fixing the price below 1.1910 with the prospect of a move to 1.1880.
From the point of view of complex indicator analysis, we see that the indicators of technical instruments on the hourly and daily periods signal a sale, while the minute interval has a variable signal (buy/sell), due to the price movement in a closed corridor.
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