11.03.202014:46 Forex Analysis & Reviews: Trading recommendations for EURUSD pair on March 11

From a comprehensive analysis, we see a partial recovery process, where the quote managed to fall just below the predicted level of 1.1300. Now about the details. The area of interaction of trading forces 1.1440/1.1480 still managed to influence the insatiable speculators, who managed to overheat the single currency so much that the recovery of more than 200 points does not seem to be something significant. In fact, the pressure of the external background has freed the hands of speculators, who easily move the market, and in the current situation, it is not quite appropriate to talk about trends and cycles. The overbought single currency was considered normal. It is worth considering that in the current state of affairs, it may turn out that market activity will continue to please speculators and we need to work on the same wave as they do.

Regarding the assumption of a change in the medium-term trend, as discussed in the previous review, we should not jump to conclusions, since everything that happens on the chart is unstable and focused on noise. Thus, when the external climate normalizes, everything can return to its original course, that is, to the original downward trend.

In terms of volatility, we see the highest indicator for the last time (183 points), which is 188% higher than the average daily value. The fact of acceleration has been maintained in the market for a long time, which led to a significant adjustment of the average indicator. So, at the end of 2019, the average daily figure was about 48 points, where it seems like the dynamics were there, but speculators did not complain. Now the average daily figure was 65 points, that is, an acceleration of 35%, which is considered a lot for the dynamics of the euro/dollar pair.

Volatility details: Monday-152 points; Tuesday-118 points; Wednesday-92 points; Thursday-125 points; Monday-155 points; Tuesday-183 points. The average daily indicator relative to the volatility dynamics is 65 points (see the volatility table at the end of the article).

Analyzing the past day by the minute, we see a two-stage downward movement, where the quote first descended to the area of the upper border of the gap, and after that, the expected acceleration occurred, just at the time of the passage of the gap price. The result is a local descent towards the level of 1.1300 (1.1275), which ended the trading day.

As discussed in the previous review, traders were waiting for a similar development, where the gap pass was the starting point for a profit in the face of the level of 1.13000.

The trading recommendation from Tuesday coincided, having another profit on the account.

(We consider selling positions if the price is fixed at 1.1330, with the prospect of a move to 1.1300-1.1285.)

Looking at the trading chart in general terms (the daily period), we see that the recovery process relative to the inertial course has not come conditionally since the existing oscillation is more similar to a pullback in comparison with the scale of the vertical impulse.

The news background of the previous day included data on eurozone GDP for the fourth quarter, where another estimate confirms a slowdown from 1.2% to 1.0%, but it is worth considering that they predicted a slowdown to 0.9% at all. The market reaction was to locally restrain the single currency from falling.

In terms of the general information background, we have a noise based on coronavirus, where Europe is drowning in cases: Italy has more than 10,000 cases of the disease; France (1.8 thousand) and Germany (1.3 thousand). The panic is on an imaginable and non-mental scale, and the head of the European Central Bank (ECB), Christine Lagarde, warns everyone of the possible consequences. So from Lagarde's judgment, the threat of an economic crisis comparable to the situation in 2008, if you do not take action in connection with the coronavirus. In turn, experts are concerned about how the regulator will behave at the upcoming meeting on March 12, whether the rate will be reduced to a negative zone, or whether we will only manage to reduce the deposit rate, as it was before. Let me remind you that the Fed set the trend for a rate cut that week, and the Bank of England supported this "flashmob", which urgently lowered the rate by 0.5%. The ECB has the last word, as next week's scheduled meeting of the Federal Reserve System, where everyone is again afraid of a possible reduction in the refinancing rate.

Regarding the rate level, US President Donald Trump spoke out, calling on the Fed to continue reducing its level.

"Our pathetic, slow-moving Fed, led by Jerome Powell, which raised the rate too quickly and lowered it too late, should reduce the rate level to the level of our competing countries. Now they have a two-point advantage with even more currency help," Trump wrote on Twitter.

Today, in terms of the economic calendar, we have data on inflation in the United States, where they expect a slowdown from 2.5% to 2.3%, which may put pressure on rumors about a possible reduction in the Fed's refinancing rate.

Further development

Analyzing the current trading chart, we see a fluctuation within the level of 1.1300, where the quote has slightly recovered from the previous downgrade. In fact, we are standing still, concentrating on the level where the external background puts pressure on the quote and new bursts are not excluded. It is worth understanding that now the main driver will be the ECB meeting and with the development of rumors, facts, there will be development. If you look at the current situation, you can take into account the cycle of 1.1275/1.1366, where you can perform local manipulations with respect to the coordinate data. The main actions are waiting for us tomorrow, where you should carefully monitor the background activity and publications on Bloomberg.

In terms of emotional mood, we see that the speculative mood exceeds expectations, thus the characteristic acceleration will remain in the market.

Detailing the minute-by-minute time interval, we see the same clock cycle 1.1275-1.1366, which was set at the very opening of the daily candle and lasted until 9:00 hours. The subsequent cycle was in the reverse course to the level of 1.1300, where the price again found a foothold.

In turn, intraday traders are now working at 1.1275-1.1366, on the principle of breaking one of the values.

It is likely to assume that external noise can give rise to new local jumps, where it is not necessary to take unnecessary risks and lay higher trading volumes. The tactic was chosen using the breakdown method of one of the values 1.1275-1.1366.

Based on the above information, we will output trading recommendations:

- Buy positions are considered if the price is fixed higher than 1.1366, with the prospect of a move to 1.1400-1.1440.

- We consider selling positions if the price is fixed at 1.1275, with the prospect of a move to 1.1200.

Indicator analysis

Analyzing different sectors of timeframes (TF), we see that the indicators for the minute and hour periods work on the oscillation within the clock cycle of 1.1275-1.1366. Daily periods invariably maintain an upward interest due to the general inertia of the course.

Volatility for the week / Volatility Measurement: Month; Quarter; Year.

The volatility measurement reflects the average daily fluctuation from the calculation for the Month / Quarter / Year.

(March 11 was based on the time of publication of the article)

The current time volatility is 79 points, which is already 21% higher than the daily average. It is likely to assume that acceleration is possible due to the external background and the speculative mood.

Key levels

Resistance zones: 1.1440; 1.1550; 1.1650*; 1.1720**; 1.1850**; 1.2100.

Support zones: 1.1300; 1.1180; 1.1080**; 1.1000***; 1.0950**; 1.0850**; 1.0775*; 1.0700; 1.0500***; 1.0350**; 1.0000***.

* Periodic level

** Range level

*** Psychological level

***** The article is based on the principle of conducting a transaction, with daily adjustments.