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13 March Forex daily review

Sergiy Zlyvko
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On Thursday, after reaching by the euro 1.3960 mark, the EURUSD backed to 1.3845 (-117 points). Originally American statistics caused rising dollar and then purchase increased by Mario Draghi statements.

In the U.S., retail sales in February rose by 0.3% and this value was in line with expectations of the market. Primary applications for unemployment benefits fell to 315 thousand. The growth from 324 thousand to 334 thousand was expected and Mario Draghi said the possible easing of monetary policy to prevent deflation in the Eurozone. This caused the sale of the euro (long positions). As a result, the main pairs on hourly time frame pivots formed reversal pricing models. Market every day generates different models that can be compressed to see in one day candles and dynamics for five days as weekly candle. Candlestick combination forms the models, which are reflected in a candlestick analysis.

On the dollar index spike has formed. On the daily chart there is a hammer. By candlestick analysis there is a reversal candle and on the hourly – reversal pattern. It should be noted that while the trend for the dollar is bearish and falling more than 50% of the daily range for Thursday will cancel our scenario on DXY.

I am inclined to think that in European trading, the dollar index decreased slightly in the U.S. session back to the level of 79.75. If traders will buy the U.S. dollar with the opening of trading in Europe, then there will be another daily formation. We expect an increase to 79.90 and then fall back to 79.60 mark. A similar pattern is observed for other currency pairs with the dollar.

At 7.00 GMT in Germany a report on consumer price inflation has been released. It is expected that the consumer price index, according to final data, in February rose by 0.5% m/m. It is not likely to have an impact on the market.

At 12.30 GMT in the United States producer price index for February will be published. With the coincidence of the forecast actual value, the market will ignore the report. With inflation dollar should strengthen, with a reducing – drop.
AUDUSD exchange rate to the U.S. session increased to 0.9100 and to the end of the day lost almost all points, which it took in Asia after strong data on the Australian labor market. The pair is trading on 0.9080 mark. In this situation, we see a further decline of AUDUSD through rollback.

On Thursday, after falling to 0.8700 USDCHF rate returned to 0.8750 mark. The mood of market participants to the dollar has not understood yet. According to the forecast, we consider the growth to 0.8780. If the dollar goes up to the estimated target is unknown, since on March 16 Crimean referendum is scheduled. The situation in Ukraine could reach the boiling point and in anticipation, the franc may be a safe haven for weekend.

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