At yesterday's trading, the main currency pair of the Forex market showed quite impressive growth, which was helped by lower yields on US Treasury bonds, as well as a drop in the US dollar index. At the same time, the extension of quarantine measures in Germany and Austria did not put pressure on the single European currency. Let me remind you that in Germany, it was decided to extend the restrictions to counter COVID-19 until April 18, since 16,000 new cases of coronavirus infection were registered in Germany yesterday. Such measures are already quite tired of the citizens of Germany and other countries where it is necessary to make decisions on the permanent extension of quarantine. People are irritated, and even somewhere embittered by such a policy of their authorities. There there are mass protests against the blockages, which often turn into clashes with the police.
The main event of yesterday was the speech of the Chairman of the Federal Reserve System (Fed) of the United States Jerome Powell, in which the monetary official emphasized the stability in the banking system of the country. In particular, Powell said that the current policy of the department under his leadership is quite acceptable since it is based on cash. Regarding the movement towards digital currencies, you need to put a lot of effort and time. In particular, this requires the support of the US Congress, as well as the new administration of the White House. In principle, as expected, Powell did not say anything radically new, however, it is necessary to note one very important point, in my opinion. We all remember the pressure exerted on the Fed chairman by former US President Donald Trump, who constantly imposed on an independent agency what monetary policy to pursue, namely, persuaded the Fed and Powell personally to implement a softer monetary policy.
With the arrival of Joe Biden in the Oval Office, the Fed and its head at this stage of time are completely independent, since Biden and his team are not up to the actions of the country's main central bank, or the policy pursued by the Fed is completely satisfied with the President and his administration. In general, Jerome Powell is now breathing much easier than during the presidency of Donald Trump. To conclude this topic and move on to the technical analysis of EUR/USD, I note that today the main event of the day will be the speech of the Fed Chairman with the semi-annual report on monetary policy, which is scheduled for 17:00 London time.
Daily
Looking at the daily chart of the euro/dollar, once again we have to state the fact that the candlestick analysis plays a crucial role in determining the further direction of the price movement. Candles do not pass without a trace. So after the appearance of Friday's long-legged Doji candle, the lower shadow of which touched the strong technical level of 1.1875 and turned out to be quite long, the market decided that this was a good signal to buy, which was demonstrated by the course of yesterday's trading. As a result of quite intense growth, the pair rolled back to the previously broken support level of 1.1952, slightly falling short of this mark.
It is also worth noting that Monday's trading closed above the red line of the Tenkan Ichimoku indicator. However, for one candle closed above, it would be premature to consider the breakdown of this line as true. At the end of the article, the euro/dollar is adjusted to its yesterday's growth. At least, at the moment it can be regarded as such. For the bears to regain control throughout trading, it is necessary to rewrite yesterday's lows at 1.1874 with the mandatory closing of the session under this mark. Their opponents, in turn, need to update the trading lows on March 22 and close higher. However, a breakout of the resistance of 1.1990 and the most important psychological mark of 1.2000 will indicate a stronger and unambiguous position of the euro bulls.
H4
According to the Fibonacci grid, stretched for a decline of 1.2242-1.1835, we see that the pair performed a corrective pullback to the level of 38.2 Fibo from this movement, after which, meeting resistance in the form of 50 MA (blue), it turns down. However, the passage up to 50 MA and attempts to update yesterday's highs may limit the black 89 exponentials, which is held at a strong technical level of 1.1950. At the end of the review, EUR/USD is trading near 1.1900. In my personal opinion, the main trading idea is still sales, which are better considered after minor rebounds up to the price zone of 1.1920-1.1930. Sales at higher prices can be considered near 1.1940-1.1950. If the reversal patterns of Japanese candlesticks appear in the area of 1.1900-1.1875 on this or hourly charts, we will get a signal to open long positions. In both cases, I do not recommend setting large goals, I believe that 30-50 points will be quite a sufficient profit. It is not known how the bidders will react to Jerome Powell's speech. The situation may change dramatically.
