No matter how many people try to predict that the trend for strengthening the European currency is about to begin, the dollar continues its gradual growth. And in spite of macroeconomic statistics, which is simply terrifying in Europe and the United States. However, it looks a little better in Europe. But this is largely due to the fact that Europe has just started reporting for March. Basically all the statistics are still for February. However, steps are being taken in Germany to ease the quarantine, and non-food stores and museums are scheduled to open next week. However, it should be noted that there is a steady decline in the number of new cases of coronavirus infection only in Germany. Meanwhile, an increase in the number of new cases of infection is still recorded in France, Italy and Spain. Just like in the United States. Nevertheless, the dollar continues to grow. And this is a banal flight from risk. Large capital flees to where it thinks it is safer. And, first of all, from the point of view of the safety of money. Interest rates are negative in Europe, which somehow does not really contribute to the safety of savings.
At the same time, as already mentioned, macroeconomic statistics, including in Europe, are not so good. The rate of decline in industrial production accelerated from -1.7% to -1.9%. This turned out to be significantly better than forecasts that indicated an acceleration of the decline to -2.2%. Moreover, the previous value was revised for the better from -1.9% to -1.7%. However, this is all for February. It is obvious to everyone that the decline in industrial production will be much deeper in March.
Industrial production (Europe):
At the same time, US data, especially on the labor market, continues to break all records. Initial applications for unemployment benefits were slightly less than last week. If back then there were 6.615 million, this time only 5.245 million. Nevertheless, it is still a lot. Moreover, this situation has lasted for the fourth consecutive week, a record 22 million Americans have sought unemployment benefits over the past month. The worst thing is that it is almost impossible for all of them to find a new job. After all, repeated requests for benefits turned out to be as much as 11.976 million. And this is an absolute record. The previous record was set just last week, when repeated requests turned out to be 7.446 million. The number of repeated requests is growing for the third consecutive week. Here you need to pay attention to the fact that the data on repeated requests are one week behind the initial ones. That is, if data on primary applications were published on April 11, then the one for repeated applications is on April 4. In other words, next week we will again see a huge number of repeated applications for unemployment benefits. But the dollar continued to strengthen. And this is explained by one thing - the flight of capital back to the United States. And the logic is very simple. If things are so bad in the United States, they are no better in other countries. It's just that US statistics are published earlier. In addition, this wave might not have reached other countries yet. But it will still come.
Number of repeated applications for unemployment benefits (United States):
Inflation data for Europe will be published today, which might fall from 1.2% to 0.7%. Most likely, the data will match the forecasts. This is indicated by data on inflation in the largest countries of the eurozone. At the same time, deflation risks are sharply growing in a number of countries, which has already led to talk that the European Central Bank may take some additional steps. It is clear that this implies a reduction in the refinancing rate to negative values. Well, declining inflation is an excellent argument in favor of such considerations. And oddly enough, this will also have a negative impact on the euro.
Inflation (Europe):
From the point of view of technical analysis, we see a further downward move, where the quote managed to locally overcome the level of 1.0850, but then there was a rebound towards the 1.0875 mark. In fact, the quote has a consistent movement from the psychological level of 1.1000, which led to a 50% recovery from the upward move of 07.04.20-14.04.20.
In terms of general consideration of the trading schedule, the daily period, it can be noted that the direction of the main trend has a downward nature, in the structure of which inertial fluctuations were formed.
We can assume that the downward interest during the recovery process can still return the quote below the 1.0850 level, where the main goal is to go down to the 1.0800 level. An alternative scenario will be considered if the price is consolidated above 1.0900.
From the point of view of complex indicator analysis, we see that all the main time intervals on which technical instruments are applied signal the prevailing downward interest, providing a sell signal.
