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Yesterday's economic calendar included the publication of a number of important statistical indicators from the UK and Europe, which affected the market directly.
Here's the details of the economic calendar for March 31, 2021.
Since the European session began, the United Kingdom's gross domestic product (GDP) for the fourth quarter was released, where there was growth by 1.3%. Annually, the rate of decline slowed down from -10.3% to -7.3%.
It should be noted that "Gross Domestic Product" represents the total volume of all goods and services produced by the United Kingdom. It is an important economic indicator of the overall picture of the UK economy. So, its growth is considered a positive signal and often leads to an increase in the value of the national currency.
In this case, the pound sterling sharply strengthened and surged around 80 points after the publication of the UK GDP data. Here, it is likely to earn profit through short-term trading positions.
The second important economic event was Europe's publication of inflation data, which rose from 0.9% to 1.3%.
The consumer price index (inflation) determines the change in prices of a selected basket of goods and services for a certain period: for example, year to year, which is shown in the report above. This indicator is considered a key economic indicator for assessing inflation and changes in purchasing preferences.
It is worth noting that inflation growth leads to the strengthening of the national currency, while a decline has a negative impact.
In this particular case, investors were concerned that inflation in the Eurozone was rapidly increasing, which theoretically could lead to a change in the direction of European Central Bank (ECB) monetary policy and this could lead to unnecessary worries. Based on the above-mentioned report, inflation rose, but it was expected to be even stronger. Here, inflation was moderate, which contributed to the euro's strengthening.
Analysis of trading charts and recommendations from March 31
Yesterday, the DXY dollar index remained at the opening level of 93.24, which resulted in a noticeable Doji candlestick pattern on the market.
What is a Doji candlestick pattern?
The Doji candlestick pattern is a candlestick on a trading chart, in which the opening and closing prices coincide or almost coincide, due to which the candlestick body is very small or absent, while the shadows on the sides are very large.
This candlestick pattern reflects the indecision of traders and can signal a reversal of the quote.
To calm your fears about the definition of a reversal, it is worth mentioning the fact that Doji can serve as a temporary regrouping of trading forces, which does not lead to a reversal and stagnation or a pullback.
The index has been rising on an upward trajectory for a long time, and anyone who has studied the primary principles of market ticks knows that any trend has both impulses and corrections.
Nevertheless, there is no reason to be frightened, as the prospect of the index growth towards the area of 94.00/94.50 is still taking place in the market.
After pulling back from the level of 1.1700, the EUR/USD pair moved towards the previously broken side channel of 1.1760/1.1805, where it met the lower border on the side and rebounded from it on a downward course.
It is possible to enter a trade deal while working on a rebound from important price levels, which can eventually brought traders an income on the deposit.
Due to the statistical data on the UK GDP, the GBP/USD pair surged immediately by about 80 points, but there was already a stop and a rebound in the area of the coordinate 1.3805, followed by stagnation. In fact, there was only one possibility during the past period – an upward turn from the news background, since there was no right moment for the rest of the time.
Trading recommendations for EUR/USD and GBP/USD on April 1
Today, the United States will publish its weekly data on applications for unemployment benefits. According to forecast, their volumes will be lowered.
USA 12:30 Universal time - Claims for benefits
It should be noted that data on benefit claims determine the state of the labor market in the US. If we see an increase in the number of applications, this indicates the weakness of the labor market, which negatively affects the US dollar. On the contrary, a decline indicates the recovery of the labor market and the growth of the US dollar.
Analyzing the EUR/USD trading chart, it can be seen that the quote was in between two coordinates 1.1700 and 1.1760, having a variable amplitude. Given the obtained data, we can assume that the breakdown of a particular border of the range is considered the most appropriate strategy for short-term trading.
As for the trading chart of GBP/USD, it shows that the closed cycle of fluctuations has the borders of 1.3705 and 1.3845, where the quote has been moving for over three days.
We can assume that the best trading tactics for short-term positions is the method of breaking through a particular border of the conditional range 1.3705-1.3845.
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