Day’s news (GMT 3):
- 10:30 Switzerland: SVME PMI (Mar).
- 10:50 France: Markit manufacturing PMI (Mar).
- 10:55 Germany: Markit manufacturing PMI (Mar).
- 11:00 Eurozone: Markit manufacturing PMI (Mar).
- 11:30 UK: Markit manufacturing PMI (Mar).
- 12:00 Eurozone: unemployment rate (Feb).
- 15:15 US: ADP employment change (Mar).
- 16:45 US: Markit manufacturing PMI (Mar).
- 17:00 US: ISM manufacturing PMI (Mar), construction spending (Feb).
- 17:30 US: EIA crude oil stocks change (27 Mar).
As expected, the pair dropped to the D3 line, subsequently rebounding to the LB balance line. The coronavirus rages on across the world. Meanwhile, the US Fed is taking measures to increase the dollar’s liquidity, which is having a negative effect on the currency itself. Regardless, the situation in Europe isn’t any better, and buying the euro isn’t an enticing prospect either.
Since the rate bounced from the D3 line without any divergence, today we expect the pair to fall from the LB line and revisit yesterday’s low with a new test of the D3 line. The technicals indicate growth, but since the pair is trading beneath the LB line, and there’s no divergence on the AO indicator, it’s reasonable to expect a test of 1.0927. We could be mistaken, but we think it better to be in the bears’ camp for today. Once the pair hits fresh lows, markets will begin preparing for Friday’s NFP report.