31.03.202014:35 Forex Analysis & Reviews: Trading recommendations for EURUSD pair on March 31

From a comprehensive analysis, we see a round of short positions that once again brought the quote within the control level. Now, about the details. The new week started with a downward move, where we can not say that there was an abnormal activity - the process was stable, the level of 1.1080 fell almost immediately, and the main level of 1.1000 was subsequently affected by the price. I assume that the upward move has come to an end since the price movement at this time has a local character due to a strong external background. Dollar positions have not disappeared. They remain with investors, and the current level may allow another overflow of assets.

It turns out that the strategy of trading in local operations is still relevant for us, and it does not matter how much and how the single currency has recovered or whether the US dollar has gone deep. We look at the overall situation and price fluctuations over the past day. As you understand, this strategy is not considered long-term, but as long as there are panic and a significant external background, we have no choice, but at the same time, this is a great opportunity for large profits.

In terms of volatility, we see a characteristic slowdown relative to the end of last week, but still, the indicator for Monday has a high level and exceeds the daily average by 24%.

Volatility details: Monday-155 points; Tuesday-183 points; Wednesday-115 points; Thursday-278 points; Friday-166 points; Monday-151 points; Tuesday-234 points; Wednesday-243 points; Thursday-326 points; Friday-194 points; Monday-191 points; Tuesday-160 points; Wednesday-133 points; Thursday-188 points; Friday-194 points; Monday-134 points. The average daily indicator relative to the volatility dynamics is 108 points (see the volatility table at the end of the article).

Analyzing the past day, we see that with the opening of trading, a downward move was set, which had a stepped character and lasted until the closing of the daily candle.

As discussed in the previous review, traders considered the coordinates of 1.1050 and 1.1150 as reference points, that is, working on their breakdown, where they eventually obtained positions to sell in the profitable zone.

Looking at the trading chart in general terms (the daily period), we see that from the beginning of 2020, the quote set the pace of inertial fluctuations, in the structure of which there were almost no corrections, and their very type was an integral structure.

The news background of the past day included data on pending home sales in the United States, where instead of slowing to 1.7%, we saw an increase from 5.8 to 9.4%.

In terms of the general information background, we see terrible anti-records of the COVID-19 virus, where the United States has already recorded more than 162,000 cases of infection, and Italy has passed the mark of 100,000, 11,600 of which are considered fatal. The panic is conquering not only the public but also the markets where Goldman Sachs analysts predict that global GDP will drop by 1% this year, more than a year after the global crisis of 2008. At the same time, the economic agency Prometeia published its assessment: the global economy will fall by 1.6%, the EU economy by 5.1% and international trade by 9.4%.

Against this background, a member of the Board of Governors of the European Central Bank, Ignazio Visco, said that the regulator is ready to consider all possible options within its mandate to support the economy in the context of the coronavirus crisis.

He also noted that the ECB is ready to increase the volume of asset purchases, change its composition and explore all possible options to support the economy in times of acute difficulties. In other words, we are talking about removing restrictions on the number of bonds that can be bought from any of the countries of the eurozone.

Today, in terms of the economic calendar, we had data on inflation in the eurozone, where we recorded a slowdown as much as 0.7% to the lowest since October last year. This level of inflation once again indicates that there is a risk of reducing the ECB refinancing rate and it should not be excluded from the analysis. Against this background, the dollar moved to strengthen.

Further development

Analyzing the current trading chart, we see that after a slight stop within the level of 1.1000, the quote resumed its downward course, just on the basis of data on inflation in the eurozone. Now we have already passed the mark of 1.0950, and this indicates that the overflow of assets into dollars has a more significant scale. In fact, the tactics of following in local positions have already proven themselves, as in this course, it is not excluded that the downward movement will continue, despite the fact that there was a significant upward move to the left. This is the very principle of panic, where trends do not matter much, and fluctuations occur at the slightest change in mood and are local in nature.

Detailing every minute of the available period, we see that the first conversion to dollars occurred during the Asian session, where there were sharp jumps in favor of the US dollar in the interval of 3:50-3:55. The subsequent fluctuation was expressed in a standstill along with the level of 1.1000, but at the start of the European session, the downward movement resumed.

In turn, traders have already received income from short positions, making partial and full fixes at the level of 1.0950.

We can assume that the downward move will still be able to manifest itself, but first, we need to fix below the level of 1.0900, where if confirmed, we will go to the side of 1.0850-1.0775.

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

- Buy positions are considered in the case of fixing higher than 1.0970, with the prospect of 1.1000

- Positions for sale are considered in terms of continuing the course, in the direction of 1.0900. If we do not have any deals, it makes sense to wait for the price to be fixed below 1.0900.

Indicator analysis

Analyzing different sectors of timeframes (TF), we see that due to the downward movement, the indicators of technical instruments in the minute and hour periods have moved to a sell signal. While the daily sections retain a buy signal due to an earlier upward move.

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

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

(March 31 was based on the time of publication of the article)

The volatility of the current time is 127 points, which is already 17% higher than the daily average. It is likely to assume that there is still a chance of further acceleration, but everything will depend on how actively speculators continue to inject.

Key levels

Resistance zones: 1.1000***; 1.1080**; 1.1180; 1.1300; 1.1440; 1.1550; 1.1650*; 1.1720**; 1.1850**; 1.2100

Support zones: 1.0850**; 1.0775*; 1.0650 (1.0636); 1.0500***; 1.0350**; 1.0000***.

* Periodic level

** Range level

*** Psychological level