The market is less and less responsive to reports regarding the spread of the coronavirus epidemic. This is a good thing since it can be aligned with the passage of the peak of the epidemic. Restrictive measures aimed at containing the spread of coronavirus are already beginning to be lifted in many countries around the world. Other countries have announced starting dates for this process. And so, the market is beginning to pay more and more attention to macroeconomic statistics. Therefore, it is not surprising that the single European currency behaved strictly in the logic of published statistics.
More precisely, it was incredibly calm and quiet when the European session opened, since no significant macroeconomic data were published in Europe. But the single European currency began to slowly strengthen its positions right before the US session, this is in anticipation of the publication of data on wholesale inventories in the United States. Forecasts said that stocks were supposed to grow by 1.0% in March. However, as soon as the data was published, the dollar quickly won back all the losses. Unexpectedly, wholesale inventories declined 1.0%. Although it looks strange. Nevertheless, it is quite possible that when building forecasts they did not take into account the excessive demand for goods, right at the very beginning of the introduction of the restricted quarantine regime. Retail sales have dramatically fallen. So, frankly, the data is in doubt. Nevertheless, this was enough for the dollar to remain stable in the end.
Wholesale inventories (United States):
At first glance, the most important event for today is the meeting of the Federal Open Market Committee. But in fact, the market will likely neglect this event. No one doubts that no decisions will be made. They have been accepted for a long time. In addition, the Federal Reserve is unlikely to announce any further incentive measures. Most likely, the regulator so far proceeds from the fact that an emergency reduction in the refinancing rate, which has passed in two stages, is a sufficient measure, and, given the situation with the coronavirus epidemic, it is too early to say that any other measures are needed. But the first estimate of United States GDP for the first quarter is of much greater interest. Moreover, they can show a recession of 4.6%. And this is only for the first quarter. Although restrictive measures in the United States were introduced only in mid-March. That is, at the very end of the quarter. These data can show the scale of the economic recession, as everyone understands that in the second quarter the recession will continue and will be much stronger. The dollar will surely be under pressure since the market is gradually returning to normal and is paying more and more attention to macroeconomic statistics.
GDP growth rate (United States):
From the point of view of technical analysis, we see the trading forces concentrated within the range of 1.0815/1.0885, that is, repeating a fluctuating pattern in the period of April 16-22. At the same time, market activity is moderate, adhering to the area of daily average volatility.
In terms of a general review of the trading chart, the daily period, a correctional course is visible from the value of 1.0727, which is still included in the structure of a deeper downward movement.
It can be assumed that trading forces will continue to be concentrated within the range of 1.0815/1.0885, where the work will be built both by the method of breaking the established boundaries, and within the range.
We specify all of the above into trading signals:
- We consider purchase positions higher than 1.0860, towards 1.0885. Deals on a breakout of the range are considered after consolidating the price higher than 1.0900.
- We consider selling positions lower than 1.0840, towards 1.0815. Deals on a breakout of the range are considered after the price is consolidated below 1.0810.
From the point of view of a comprehensive indicator analysis, we see an upward interest in hour and minute periods due to the existing correctional course. Daytime periods have a variable signal due to another stagnation.
