EUR/USD Forecast: Russia and the Fed boosting dollar’s demand
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CLAIM OFFEREUR/USD Current Price: 1.0945
- Russian President Putin said Kyiv is not serious about finding an acceptable solution.
- ECB’s President Christine Lagarde still confident inflation will ease by 2024.
- EUR/USD keeps meeting sellers around the 1.1000 figure, pressure mounts.
The EUR/USD pair trades at around 1.0940 as the American session comes to an end, trimming early gains after reaching a fresh weekly high of 1.1019 during London trading hours. The latest bout of dollar demand came from Russia, as President Vladimir Putin said that Kyiv is not serious about finding a mutually acceptable solution. Also, the country submitted a request to leave the Council of Europe after being suspended on February 25. Earlier in the day, Moscow announced a series of sanctions on US authorities, including President Joe Biden.
European Central Bank President Christine Lagarde spoke at the WELT Economic Summit and noted that the uncertainty surrounding the economic outlook had increased dramatically, although she also said that inflation is still forecast to decline gradually and settle near the central bank’s 2% target by 2024.
Data wise, the EU published January Industrial Production, which was down 1.3% YoY, much worse than anticipated. The German ZEW survey showed that Economic Sentiment plummeted to -39.3 in the country and to -38.7 in the EU in March. The slump is directly linked to the Eastern European crisis, inflation, and a fresh outbreak of coronavirus contagions in Germany. Finally, the US has posted the February Producer Price Index, which rose 10% YoY, as expected. The core reading printed at 8.4%, up from the previous 8.3% but below the 8.7% expected.
On Wednesday, the focus will be on the US, as the country will publish February Retail Sales, foreseen up by a modest 0.4%, while the US Federal Reserve will announce its monetary policy decision later in the day. The central bank is expected to raise rates at least by a quarter-point. In the case US officials decide so, market players could feel disappointed as the modest hike will do little to bring inflation down.
EUR/USD short-term technical outlook
From a technical point of view, the bullish potential for EUR/USD is quite limited. The pair is once again below the 23.6% retracement of its latest daily slump at around 1.0965, while strong selling interest remains aligned at around the 1.1000 level.
The daily chart shows that the pair keeps developing below bearish moving averages, with the 20 SMA accelerating south below the longer ones. Technical indicators, in the meantime, remain directionless near oversold readings, reflecting the absence of buying interest.
The 4-hour chart offers a neutral-to-bearish stance, as EUR/USD trades below a bearish 20 SMA, as the longer ones accelerate their slides above it. Technical indicators faltered around their midlines and are currently grinding lower within negative levels, hinting at lower lows for EUR/USD for the week.
Support levels: 1.0900 1.0850 1.0805
Resistance levels: 1.0970 1.1020 1.1070
EUR/USD Current Price: 1.0945
- Russian President Putin said Kyiv is not serious about finding an acceptable solution.
- ECB’s President Christine Lagarde still confident inflation will ease by 2024.
- EUR/USD keeps meeting sellers around the 1.1000 figure, pressure mounts.
The EUR/USD pair trades at around 1.0940 as the American session comes to an end, trimming early gains after reaching a fresh weekly high of 1.1019 during London trading hours. The latest bout of dollar demand came from Russia, as President Vladimir Putin said that Kyiv is not serious about finding a mutually acceptable solution. Also, the country submitted a request to leave the Council of Europe after being suspended on February 25. Earlier in the day, Moscow announced a series of sanctions on US authorities, including President Joe Biden.
European Central Bank President Christine Lagarde spoke at the WELT Economic Summit and noted that the uncertainty surrounding the economic outlook had increased dramatically, although she also said that inflation is still forecast to decline gradually and settle near the central bank’s 2% target by 2024.
Data wise, the EU published January Industrial Production, which was down 1.3% YoY, much worse than anticipated. The German ZEW survey showed that Economic Sentiment plummeted to -39.3 in the country and to -38.7 in the EU in March. The slump is directly linked to the Eastern European crisis, inflation, and a fresh outbreak of coronavirus contagions in Germany. Finally, the US has posted the February Producer Price Index, which rose 10% YoY, as expected. The core reading printed at 8.4%, up from the previous 8.3% but below the 8.7% expected.
On Wednesday, the focus will be on the US, as the country will publish February Retail Sales, foreseen up by a modest 0.4%, while the US Federal Reserve will announce its monetary policy decision later in the day. The central bank is expected to raise rates at least by a quarter-point. In the case US officials decide so, market players could feel disappointed as the modest hike will do little to bring inflation down.
EUR/USD short-term technical outlook
From a technical point of view, the bullish potential for EUR/USD is quite limited. The pair is once again below the 23.6% retracement of its latest daily slump at around 1.0965, while strong selling interest remains aligned at around the 1.1000 level.
The daily chart shows that the pair keeps developing below bearish moving averages, with the 20 SMA accelerating south below the longer ones. Technical indicators, in the meantime, remain directionless near oversold readings, reflecting the absence of buying interest.
The 4-hour chart offers a neutral-to-bearish stance, as EUR/USD trades below a bearish 20 SMA, as the longer ones accelerate their slides above it. Technical indicators faltered around their midlines and are currently grinding lower within negative levels, hinting at lower lows for EUR/USD for the week.
Support levels: 1.0900 1.0850 1.0805
Resistance levels: 1.0970 1.1020 1.1070
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