Last Updated on March 17, 2022
The EURUSD trading week will shift the US binary options brokers‘ attention towards the Fed’s rate hike that is expected during the week and how the Fed intends to handle the inflation pressures which is affecting the US currency. Furthermore, the financial market is likely to price in about a 2bps interest rate hike as they await the press conference.
EUROPE: GERMAN ZEW Economic Sentiment
Germany institutions and analysts surveyed 300 Institutional Investors who were asked to rate the general condition of operating businesses, employment, prices, new orders, and inventories among other factors during the survey. They are to rate the German economic outlook in the next 6 months. Any figure that is above 0.0 shows optimism while a figure below it shows pessimism in the system.
The forecast is 5.2 while the previous is 54.3.
US Unemployment Claims
Data released from the department of labor indicates records of individuals who officially filled for an unemployment insurance policy for the first time during the new week.
However, the number of unemployed persons will affect the economic activities of the country because consumers spending is related to the labor market. For those stirring the country’s monetary policy, unemployment is a major point for them.
The previous report on unemployment claims was 227K while the forecast is 221K. A lower outcome is good for the US dollar while a greater outcome is not suitable for the currency.
EURUSD Technical Analysis
EUR vs. USD Monthly Chart Overview: Bearish Swing Reaching for Support Zone
Monthly Resistances: 1.12000, 1.14000.
Monthly Supports 1.07272, 1.06000.
The EURUSD pair dropped about 4.05% in March 2022 as the tension in Ukraine affects the Europe block. Today marks day 19 of Russia’s aggression on the people of Ukraine. If the aggression should continue and the negotiation between them seems to fail, the EURUSD pair may drop lower than the support zone of (1.06000) of 02 March 2020.
If the tension in Ukraine is put under control we may see the price finding support around the current zone. The 1.08000 levels may attract more Buyers if the zone is not breached as the trading activities continue on the monthly time frame.
EUR vs. USD: Weekly Chart Bearish
Weekly Resistance Level: 1.22509, 1.16553, 1.19148
Weekly Support Level: 1.15112, 1.16785, 1.14000
On the weekly chart, the EURUSD pair closed the week in a Doji as the price could not find its direction after the 1.11234 resistance zone rejected the price of the pair. In a similar pattern, the 1.07979 zones rejected the price of the pair around the zone.
The market is quite as it holds for the Fed’s outcome and a breakthrough of peace amidst the rising tension in Ukraine.
Days before the Feds meeting will be meaning a waiting period for Forex brokers because a lot of activities like sanctions on the Russian economy, ECB commentary, and sanctions and geopolitics will largely influence the financial market and the stock market as well.
EUR vs. USD Daily (1D) Overview: Bearish
Daily Resistance Level: 1.14000, 1.1235
Daily Support Level: 1.06310, 1.08000.
From the market structure of the EURUSD pair, we can see that the trend is still bearish, as the price is still below the 50 EMA. The falling price has slowed around the 1.08000 levels when the US dollar showed some weakness as the Fed prepares its report on interest rate hikes.
At the close of the market last week, the uncertainty in the war in Ukraine lead to the sell-off in the financial market. However, the negotiation continues among the Russian delegates and the Ukraine representatives. If the meeting should have a positive outcome the Euro will be stronger against the US dollars.
Forex brokers are to brace up for the major banks meeting this trading week because the market will be volatile and the negotiation going on between Russia and Ukraine will influence the risk appetite for traders and investors.
The week is starting on a bullish scenario as we expected the negotiation between the two countries to have a positive outcome that will lift the Euros from the bearish trend on the daily chart.
The bearish trend still dominates the market and if the price can breakout below the 1.07979 zones the trend will continue and the US dollar will be stronger against the Euro.
Conclusion and Weekly Price Objectives
The Feds chair Jerome Powell will be addressing forex brokers, investors, and retail traders during the week on the recent development on the interest rate. An outcome with a hawkish comment will strengthen the US dollar over other pairs, and that will bring the EURUSD pair back to the downtrend.