German Chancellor Angela Merkel, who is retiring in late 2021, is struggling to fight the raging coronavirus in the country, calling the third wave of infections the most difficult they have faced.

"I must say that the third wave was the most difficult for us," she said at the opening of the international industrial exhibition in Hanover.

According to the Chancellor, the vaccine remains the main weapon as before, as well as control over the situation, which at the current time, following from the statistics of infection, is suffering in the country.

The number of COVID-19 infections in Germany sharply increased. In early March, a daily increase of 5,000-6,000 new cases is recorded, while in April this figure varies from 15,000-30,000 per day.

Given the fact that the country has a quarantine, which is repeatedly extended for a new period, what kind of economic recovery can we talk about, and note that we are now talking about the locomotive of the whole of Europe.

Today, April 13, Chancellor Merkel's cabinet is expected to approve a law setting out nationwide rules for restrictive measures aimed at combating the coronavirus.

In simple terms, the German Chancellor insisted on the adoption of a law that updates existing legislation, as some of Germany's 16 regions were unable to implement the limited measures agreed with her government, despite the increase in the number of infections.

Germany is struggling to control the new outbreak, while local officials are hesitant to introduce new measures just months before national elections. The stalemate began last month when Merkel apologized after holding a planned hard Easter lockdown and then warned that she planned to take the situation under maximum control.

Some local officials questioned the need for the law and expressed doubts about its compatibility with the German constitutional rules on the division of power between the federal and regional governments.

Divergence of interests, a wave of new cases of infection, an eternal lockdown, and many other factors put pressure on investors, while the end of the pandemic is still not visible on the horizon. Business in Europe will continue to experience the worst times for a long time to come, and it is clearly not worth talking about a recovery in 2021.

What is happening in the market in terms of technical analysis?

Since the beginning of the year, the EUR/USD currency pair has been following a correction trajectory from the peak of the medium-term trend of 1.2349, the scale of the euro weakening is more than 5%, this is quite a lot that will automatically re-qualify a regular correction into an elongated correction.

It may seem that the foremen have already returned to the original channel of the medium-term upward trend, but when you see how difficult the situation in Europe with the coronavirus and the economy is, this desire to return to upward development immediately disappears.

Since the beginning of April, the euro exchange rate has been actively recovering, but it is worth considering that the price reversal occurred within the area of interaction of trade forces at 1.1600/1.1650/1.1700, thus the expectations of a reversal were quite high and the technical component should not be ruled out.

Compared to the recent five trading days (April 7-13), traders might have noticed that the upward move from the pivot point 1.1700 moved from acceleration to deceleration, forming a sideways movement in the 1.1860/1.1920 range.

In this case, the newly-made range with a high degree of probability will serve as a lever for speculators, and this is behind the main movements.

If we proceed from the fact that the corrective move from the peak of the medium-term trend is still relevant, then the breakdown of the lower border of the 1.1860 range has great chances of execution, which will lead to the resumption of the downward trend and as a result of the prolongation of the correction.

At the same time, the main emphasis was placed on speculative interest among traders regarding the available range, here fundamental factors may be rejected and replaced by the greed of speculators.

If you start from this theory, then you should just work on the breakdown of a particular border of 1.1860/1.1920, catching the outgoing impulse.

What is happening on the GBP/USD chart in terms of indicator analysis and market dynamics?

Analyzing a different time sector, we see that technical instruments on the minute and hour intervals have a variable signal (buy/sell) due to the price following within the 1.1860/1.1920 range. Due to the upward orbit from the pivot point 1.1700, the daily period change the signal from sell to buy, but this may be a local manifestation.

In terms of market dynamics, it can be seen that the daily volatility has dropped significantly, by about 30%, but this is caused by the price movement in the range. If we proceed from the fact that the sideways move can become a cumulative process, then soon we will expect an acceleration in the market.