The euro/dollar pair spent some time near the support area of 1.2032-1.2042 on the hourly timeframe on March 2. Thus, there were hopes that an unsuccessful attempt to overcome this area would provoke an upward movement. However, instead, the bears continued to put pressure on the pair, which led to an even greater decline for the quotes, to the extreme level of 1.2004. In fact, the psychological level of 1.2000 was reached, from which the rebound occurred. Thus, the upward correction against the movement, which lasted nonstop for three days, has nevertheless begun. Now it's aiming for the Kijun-sen and Senkou Span B lines of the Ichimoku indicator. A rebound from any of them can provoke the resumption of the downward movement. Although, as we have already discussed in the fundamental articles, there are now few compelling reasons for strengthening the dollar even further. Despite the fact that this currency has been depreciating for almost a year, there is no fundamental reason for forming a new downward trend now. Therefore, the upward movement is more likely to resume. In yesterday's article, we advised you to sell the pair if the price surpasses the 1.2032-1.2042 area. Such a signal was generated, but it brought no more than 10 points of profit, because an upward movement already began from the nearest target of 1.2004. You were advised to buy the pair when the price rebounds from the 1.2032-1.2042 area. As a result, a rebound did not occur from this area, however, the pair settled above this area, which can also be considered a buy signal. The targets are the two main lines of the Ichimoku indicator.
Both linear regression channels are pointing to the downside on the 15-minute timeframe. Thus, in the short term, the downward trend continues. The chart clearly shows that sellers could not overcome the area of 1.2032-1.2042 three times, there were no false breakouts of this area, but in the end they still settled below it. And in the afternoon, the bulls already managed to overcome this area, so now it is more preferable to move up, especially after the pair fell without recoil for three days, without any good reason.
Traders could only pay attention to the report on the consumer price index in the European Union. However, as is often the case in recent years, there was no special reaction to the macroeconomic statistics. To be more precise, there was no reaction at all. The euro continued to fall in price during the European trading session. Although formally, this can be considered a reaction, since the main indicator of inflation decreased from 1.4% y/y to 1.1% y/y. However, we are now inclined to believe that the movement of the last few days was not unambiguously associated with the US macroeconomic reports from last Friday. Most likely, a whole set of factors, including both technical and fundamental, played a role.
The European Union will publish the index of business activity in the service sector for February, which, according to analysts, may remain below the level of 50.0. Also, representatives of the European Central Bank Weidmann, Panetta and Schnabel will make speeches in the European Union. Meanwhile, the value of the ADP report on changes in the number of people employed in the private sector of the economy will also be announced in America on Wednesday. Recall that the market ignored all of the latest ADP reports, so there is no reason to assume that traders will work it out. Most likely, we will see a purely technical movement from the pair.
We have two trading ideas for March 3:
1) Bulls released the pair to level 20, and only around it did they realize and began to attack. Since the price settled above the area of 1.2032-1.2042, then buying the pair is relevant for this signal, and you can aim for the Senkou Span B (1.2101) and Kijun-sen (1.2116) lines. Take Profit in this case can be up to 50 points. When overcoming the Kijun-sen line, you should stay in long positions with targets at 1.2145 and 1.2190.
2) Bears held the initiative in the market for three days, but now it is time for a correction. So now you are advised to open short positions in case of a rebound from the Kijun-sen (1.2116) or Senkou Span B (1.2101) lines, while aiming for the support area of 1.2032-1.2042 and the support level of 1.2008. Take Profit in this case can be up to 90 points.
