Hello, traders!
Yesterday was a very busy day with various reports and statistical calculations. In this review, I will try to briefly cover and highlight all the most important events of today, after which we will proceed to consider the charts of the main currency pair of the Forex market.
So, yesterday, the European Central Bank (ECB) published the report of the last monetary policy meeting, where it recognized the measures taken to counter COVID-19 for the European economy as effective. First of all, they were referring to the purchase of bonds or the program of quantitative easing (QE), the size of which is 1,350 billion euros. Perhaps this is the main focus of the European Central Bank's report.
Yesterday's data from the US on orders for durable goods exceeded economists' expectations, however, initial applications for unemployment benefits rose above forecasts. Specific figures can be found in the economic calendar.
Today, on the last day of weekly trading, the Eurozone at 09:00 (London time) will present data on the monetary aggregate M3. From the United States at 13:30 (London time), reports on personal income and expenditures of American citizens will be received, as well as the basic index of prices for personal consumption expenditures in monthly and annual terms will be published. As it became known yesterday, the US GDP in the first quarter decreased by 5%, which was not a surprise and coincided with analysts' forecasts.
Daily
In yesterday's trading, the US dollar continued to be in demand as a safe asset due to the growth of COVID-19 infections in several US states. The dollar also received support amid trade contradictions between the US and the European Union.
As a result, at the end of trading on Thursday, the EUR/USD pair showed a downward trend and ended trading at 1.1216. Despite the closing of the day above the mark of 1.1200 and a relatively long lower shadow, this morning the pair continues to remain under pressure, which is still quite moderate.
If the bearish scenario continues, the pair risks falling into the strong price support zone of 1.168-1.148 that has already been indicated more than once, where, in my opinion, its future fate will be decided.
If the euro/dollar bulls manage to take the initiative from their opponents and start raising the rate, they will have to face strong resistance at 1.1260, where yesterday's highs are marked, and the Tenkan line of the Ichimoku indicator also runs. A confident overcoming of this mark and closing trades above 1.1260 will strengthen the buyers' positions and send the pair to a strong technical area of 1.1300-1.1353. In case of passing 1.1353, the next goals of the euro bulls will be 1.1383 and 1.1422. However, the path to these prices is far, difficult and thorny, so, given the market sentiment and the technical picture on the daily chart, it is most likely that the downward dynamics will continue. On the other hand, on the last day of weekly trading against the background of profit-taking, a pullback may occur, and the pair will get a chance to slightly reduce the losses incurred over the past two days.
H1
On the hourly chart, at the moment of the article's completion, the pressure on the euro/dollar pair increased and the decline became more intense. As I have repeatedly noted in previous materials, Friday is not the best day to open new positions, especially for sales, on the approach to the support area of 1.168-1.148.
In this regard, I recommend that you plan to sell EUR/USD after rising to the levels of 1.1237, 1.1244 and 1.1250. A confirmation signal for opening short positions on the main currency pair will be the appearance of bearish candles near the listed prices.
As for purchases, in my personal opinion, they are more risky. However, if the support area of 1.168-1.148 shows reversal bullish models of candle analysis, you can try to buy, but with small goals. By the way, I don't recommend setting big goals for sales either. If you are going to enter the market today, it is better to close deals before the end of trading and do not transfer positions to Monday.
Good luck!
