The economic calendar was almost empty yesterday. The only thing that market participants were able to speculate on was the lending market data in the UK, which surprisingly came out better than the forecast.
Regarding the details of the available news, we expected a decline in all areas of lending, but instead the volume of mortgage lending in February increased from 5.17 billion pounds to 6.20 billion pounds. At the same time, the volume of consumer lending slightly fell less than forecast, which pleased traders.
The reaction of the market was reflected through the pound's local growth.
The situation in Europe and the US is calm, although there is quite a strong information flow related to hot topics: COVID-19 and the Suez Canal.
At the same time, the DXY dollar index continues to grow, following the path of our forecast from mid-March. Yesterday, the index rose by 0.22%, updating the local high of 92.91 --> 92.94. It should be recalled that the growth of the index tells us about traders' mood relative to the dollar. If it grows, then the volume of dollar positions against its competitors will also grow.
Our forecast for the index remains the same. The upward movement towards the area of 94.00-94.50 is considered. If the expectation matches, we will take away the prolongation of the correction course for the EUR/USD and GBP/USD currency pairs.
Now, let's discuss the traditional currency pairs, where the pound sterling was the only active instrument due to the above-mentioned reason.
Looking at the trading chart of the GBP/USD pair, it can be seen how speculators caught the quote during the first half of the European session, which led to an impulse movement in the direction of the coordinate 1.3850, where we found a resistance.
It should be considered that the downward interest is still relevant in the market, and the quote is steadily following the limits of the correctional course from the high of the mid-term trend 1.4224 ---> 1.3669.
As for the EUR/USD pair, there is an unusual two-day stagnation (March 26 and 29), where market participants focused on the borders of the amplitude of 1.1760/1.1805. The market considers this kind of fluctuation as accumulation, which leads to a subsequent acceleration. Yesterday's trading recommendation will consider the prolongation of the correctional move from the high of the medium-term trend (1.2349 ---> 1.1760) if the price is held below the level of 1.1760, which now occurred in the market.
Trading recommendation for EUR/USD and GBP/USD on March 30
Today, Spain's preliminary inflation data was already published, which rose by 1.2%. However, the market ignored it. A similar indicator will be published in Germany, where inflation is also expected to increase. It should be noted that traders often ignore such an important indicator when it is published for individual countries of the Eurobloc.
The United States, in turn, will release the S&P/CS Composite-20 for January, which is expected to rise.
If we analyze the trading chart of the EUR/USD pair, it showed that speculators could not resist and broke through the lower border of the cumulative range of 1.1760/1.1805 at the opening of the European session. This is a local movement, but at the same time, it indicated that the downward interest is still in force in the market.
For sellers to further weaken the Euro currency, it is necessary for the quote to hold below the level of 1.1750, preferably for the H4 time frame. In this case, the path will open towards the main support level of 1.1650.
In terms of the trading chart of GBP/USD pair, it can be seen that market participants focused on the variable level of 1.3750, which was tested at the start of the European session.
We expect a downward activity and an increase in the volume of short positions (sell positions) if the price is kept below the level of 1.3750 for an H4 period, which will lead us towards the range of 1.37000-1.3780.
Traders will consider an alternative scenario of market development if the price fails to hold below the 1.3750 mark, which will result in an amplitude of 1.3750/1.3800.
