15.04.202115:21 Forex Analysis & Reviews: EUR/USD. Speculators devise a plan that could lead to new speculative manipulations in the market

No matter where you look, nothing positive can be seen in Europe, but the European currency is pulling up as if nothing has happened, gaining more than 280 points in weight since the beginning of April.

Do you not think this is very suspicious when at the same time we receive news such as, for example, that in Germany the occupancy rate of intensive care units has increased to 88% to date, which is the highest rate in more than a year.

At the same time, since the beginning of the year, France has had a steady increase in new cases of COVID-19 cases, which is actively bringing them closer to the autumn peak.

In simple words, Europe is still drowning in a pandemic, and with such terrifying indicators, it is inappropriate to talk about an early lifting of quarantine measures and economic recovery.

Thus, a growing euro is a speculative manifestation of market participants, or someone is strongly selling the dollar.

The theory about the sell-off of the US dollar was prompted by the recently published statistics on inflation in the United States, where investors were unnecessarily afraid that such a strong increase in consumer prices would provoke the Federal Reserve to change its monetary policy strategy.

The fear of unpredictability, coupled with the Fed's silence, led to a sell-off in the dollar, but the euro, which is not in a better position than the United States, may at one time or another simply jump out of long positions, and this will lead to a sharp downward move.

Thus, analyzing the facts of influence on the quotes, it is assumed that soon speculators can play a fairly good game, which will lead to new speculative manipulations in the market.

What is happening in the market in terms of technical analysis?

The EUR/USD currency pair, having a distinct inertial move, entered the area of the psychological level of 1.2000 (1.1950/1.2050/1.2050), where it can be said that the overbought status of the euro is on the edge.

The last time such a convergence of the price with the psychological level was observed on March 11 and 18, in both cases, there was a natural rebound, where the volume of long positions was sharply reduced, while the volume of short positions entered the growth phase.

At the moment, given that the quotes are still in the stage of an extended correction from the peak of the medium-term trend (1.2349 ----> 1.1703), there is a chance for the resumption of the downward trend in the market.

Expectations and prospects

If we proceed from the logical basis associated with the area of the psychological level of 1.2000, then the chance of a downward development is quite high.

It is too early to talk about a full-scale recovery of the downward movement, but why not about a local manifestation, simply due to the flow of speculations.

Where should you consider entering short positions?

In this situation, there is no need to rush, the Euro/Dollar, as before, is in a stream of upward momentum, and we still need a signal for sellers. A possible technical signal could be a price consolidation lower than 1.1950 in a four-hour period, which in the future will open the way in the direction 1.1920-1.1875-1.1810.

At the same time, a high concentration of speculators with a degree of uncertainty may lead to a backlash, which will ultimately aggravate the euro's position, but you should still play it safe and consider upward positions.

This scenario of market development will be considered if the price is not kept below 1.1950, and the quotes break the level of 1.2000, heading towards the upper deviation of 1.2050.

What is happening on the chart in terms of indicator analysis and market dynamics?

Analyzing a different time sector, we see that technical instruments signal a sell on a minute interval due to a primary rebound from the level of 1.2000. The hourly and daily time frames are still on an upward turn, signaling a buy.

In terms of market dynamics, it can be seen that from the moment the price approached the area of the psychological level, volatility began to decline, which cannot be said about the coefficient of speculative transactions.