EURUSD Analaysis

[ZforexCM]

EURUSD

Fundamental Outlook: According to the chief economist of the European Bank for Reconstruction and Development, Beata Javorcik, market predictions of interest rate cuts in central Europe are overly optimistic due to the possibility of inflation remaining higher than expected. Despite the slowdown of the region, caused by the fallout from the conflict in Ukraine, rate-setters in central Europe, who led the global monetary tightening trend in 2021, are currently focused on maintaining stable rate policies.

Technical Analysis : After four consecutive days of strong uptrend, the pair faced a barrier at 1.0760 and pulled back. The parity is trading above the 50- day exponential moving averages currently and it is important to stay above that level for further increases. However, the formation of a double bottom pattern suggests a target of 1.0800. To achieve this, the pair needs to break through the 1.0760 resistance level first. The current pullback may continue until the double bottom resistance is broken, where a retest is possible. If the decline persists, the support level to watch is at 1.0650.

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EURUSD
Fundamental Outlook: The European Central Bank (ECB) policymakers are scheduled to hold a meeting on Thursday. However, given the turmoil in the financial markets, the ECB might need to deviate from its plans to execute another significant interest rate hike, despite persistently high inflation. On Thursday, Barclays stated that it is more probable for the European Central Bank (ECB) to increase interest rates by 25 basis points, rather than 50 basis points or not at all when it meets on Thursday.

Technical Analysis: In the technical analysis today, the focus is on the European central bank’s interest rate decision and its impact on the currency pair. Volatility is expected to remain high, with the euro showing a relatively calm trend ahead of the announcement.

Yesterday’s sharp fall has left the euro struggling to surpass the 50-day moving average over the past three days, indicating strong resistance in this area. Unless the currency can close above the 1.0725 level, any upward movements may be limited. It is, however, positive that the euro has not fallen below the 200-day exponential moving average, which can be seen as a potential support level.

Overall, the technical analysis suggests that the current resistance zone will be a key factor in determining the currency’s direction in the short term, with traders closely monitoring the support level at 1.0550.

[ZforexCM]

EURUSD
Fundamental Outlook: Goldman Sachs has recently commented that despite the current volatility in financial markets, the European Central Bank (ECB) will continue its tightening mode. However, the bank has revised its expectation for the peak of the ECB policy rate, lowering it from 3.75% to 3.50%. Goldman Sachs also predicts that core inflation in Europe will remain high in the near future and expects annual inflation to reach 5.8% in March.

Technical Analysis : The currency pair has been trading within a horizontal channel, with the 50-day moving average acting as a strong resistance and the 200-day exponential moving average providing reliable support. Recently, the pair has bounced off the support level of the channel for the third time, indicating a bullish sentiment in the market. Currently, the pair is attempting to break through the 8-day exponential moving average. Traders should keep an eye on the 1.0680 level, which is a critical resistance level in the short term. If the pair manages to close above 1.0725, it may attract further buying interest from traders.

Support: 1.0610 - 1.0575 – 1.0540
Resistance: 1.0680 – 1.0695 – 1.0725

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EURUSD
Fundamental Outlook: Two senior executives involved in the discussions have informed Reuters that at least two major banks in Europe are assessing the possibility of contagion within the banking sector of the region. These banks are seeking stronger indications of support from both the Federal Reserve and the European Central Bank to help deal with any potential fallout.

Technical Analysis : The currency pair has been consolidating within a range-bound market, where the 50-day moving average has acted as a significant barrier, while the 200-day exponential moving average has acted as a reliable support. The pair has recently rebounded off the channel’s support level for the third time, indicating a bullish market sentiment. Currently, the pair is attempting to test the 8-day exponential moving average, which may provide short-term resistance. Forex traders should monitor the 1.0685 level closely, as it is a crucial resistance level in the near term. If the pair manages to close above the 1.0725 level, it may attract further buying interest from traders. Conversely, if the pair falls below the 1.0610 support level, it may signal further weakness in the market.

Support: 1.0610 - 1.0575 – 1.0540
Resistance: 1.0685 – 1.0710 – 1.0725

[ZforexCM]

EURUSD

Fundamental Outlook: Goldman Sachs revised its economic growth projection for the eurozone in 2023, citing persistent turmoil in the global banking system and rising economic uncertainty. The investment bank lowered its growth forecast for the region by 0.3%, resulting in a projected GDP growth rate of 0.7% for 2023.

Technical Analysis : The currency pair is experiencing difficulties in breaking above the 50-day moving average and seems to be encountering a barrier at this point once more. This is indicated by the purple line on the chart. However, the 200-day exponential moving average, represented by the yellow line, is providing support from below. Additionally, the 1.0685 level can be considered as a support level. On the other hand, if the pair manages to surpass the 1.0725 level, it will be viewed as a critical resistance level and closely monitored.
Support: 1.0685 – 1.0660 – 1.0605
Resistance: 1.0725 – 1.0760 – 1.0775