Markets continue to study the impact of coronavirus on the economy.
Today, traders focus on the March data on
business activity in the euro area as well
as jobs data for February.
Although the unemployment rate in the euro
area fell to 7.3% from 7.4%, the foreign exchange
market dynamics did not change much.
The US dollar continues to gain ground at
a moderate pace.
Market participants are well aware that jobs
data shows the labour market situation for
February.
They realize that in March, due to the global
coronavirus pandemic, its related restrictions
and counter-epidemic measures, the situation
is completely different.
It will come as no surprise when March unemployment
rate in the euro area will rise sharply.
Oddly enough, the stronger US dollar stems
from the situation on the labour market employment.
There has been a tendency in the market when
before some important releases are published,
quotes move backwards of what experts predicted.
This is exactly what is happening to the US
dollar.
The ADP national employment report will unfold
the dismal picture of the labour market in
the United States.
The employment rate is expected to reduce
by 170 thousand.
This would be the first decline since September
2017.
A similar sharp decline in employment was
seen during the crisis of 2008-2009.
However, at that time, the number of unemployment
claims was not so high.
So, amid the news, the dollar is likely to
lose ground, giving in to the euro and pound.
In the meantime, the euro/dollar currency
pair is making a correction from the level
of 1.1180.
It managed to decline to the area of ​​1.0900/1.0950
and slowed down.
The pair is likely to break through the support
area of ​​1.0900/1.0950.
However, if the US dollar is weighed down
by the economic statistics again, the pair
will gain momentum moving towards the levels
of 1.1080/1.1145.
- Open buy deals if the price consolidates
above 1.0980, with a view to go towards 1.1080/1.1145.
- Open sell deals if the price consolidates
below 1.0900, with a view to move towards
the level of 1.0850.
The pound/dollar pair has been moving in a
sideways trend within the range of 1.2280/1.2480
for more than 50 hours.
This means that market participants have received
a signal of possible accumulation with subsequent
acceleration.
This price fluctuation is anticipated to be
temporary.
So, the best trading tactic in this case remains
the breakout of the borders.
- Open buy deals if the price consolidates
above 1.2400, with a view to move towards
1.2450-1.2500.
The main positions should be opened after
the price is settled above the level of 1.2500.
- Open sell deals if the price consolidates
below 1.2280, with a view to move towards
the levels of 1.2240-1.2200.
