EUR/USD Forecast: The 200-day SMA holds the downside…for now
Premium|Take advantage of 75% OFF on your first month.
Grab this special offer, it's a 1 year for FREE deal! And access ALL our articles and analysis.
You have reached your limit of 5 free articles for this month.
BLACK FRIDAY SALE! 75% OFF!
Grab this special offer, it's a 1 year for FREE deal! And access ALL our articles and analysis.
CLAIM OFFER- EUR/USD starts the week below 1.0900.
- Major central banks decide on interest rates this week.
- The 1.0850 zone emerges as key support for the time being.
The new trading week for EUR/USD began with indecision amidst the equally vacillating price action surrounding the greenback, while scarce volatility also added to an uneventful Monday.
While market participants have already factored in approximately 120 bps in rate cuts for the current year, there seems to be a growing debate between market participants and the ECB's rate-setters regarding the timing of the central bank's decision to start reducing the region's policy rate.
Despite inflation running well above the bank's target, European policymakers seem inclined to maintain a restrictive stance, although the weak fundamentals in the bloc appear to curtail any upside potential for the European currency.
On the other side of the Atlantic, investors are assigning just over 40% probability to a reduction in the Fed's FFTR at the March 20 meeting, according to the FedWatch Tool tracked by CME Group.
EUR/USD daily chart
EUR/USD short-term technical outlook
If the EUR/USD falls further and breaches the 2024 low of 1.0844 (January 17), it might make touch with the December 2023 low of 1.0723 (December 8) before the weekly low of 1.0495 (October 13, 2023), followed by the October 2023 low of 1.0448 (October 3) and the round level of 1.0400. The pair's bullish outlook is expected to be challenged below its 200-day SMA, today at 1.0845.
The 4-hour chart indicates that the consolidative attitude in spot is likely to persist. In the event of a break above this theme, the first resistance level is around the 200-SMA at 1.0919 prior the 100-SMA at 1.0943 ahead of 1.0998. The MACD has recovered somewhat, and the RSI retreated to the 46 zone. On the downside, immediate contention emerges at 1.0844 prior to 1.0723.
- EUR/USD starts the week below 1.0900.
- Major central banks decide on interest rates this week.
- The 1.0850 zone emerges as key support for the time being.
The new trading week for EUR/USD began with indecision amidst the equally vacillating price action surrounding the greenback, while scarce volatility also added to an uneventful Monday.
While market participants have already factored in approximately 120 bps in rate cuts for the current year, there seems to be a growing debate between market participants and the ECB's rate-setters regarding the timing of the central bank's decision to start reducing the region's policy rate.
Despite inflation running well above the bank's target, European policymakers seem inclined to maintain a restrictive stance, although the weak fundamentals in the bloc appear to curtail any upside potential for the European currency.
On the other side of the Atlantic, investors are assigning just over 40% probability to a reduction in the Fed's FFTR at the March 20 meeting, according to the FedWatch Tool tracked by CME Group.
EUR/USD daily chart
EUR/USD short-term technical outlook
If the EUR/USD falls further and breaches the 2024 low of 1.0844 (January 17), it might make touch with the December 2023 low of 1.0723 (December 8) before the weekly low of 1.0495 (October 13, 2023), followed by the October 2023 low of 1.0448 (October 3) and the round level of 1.0400. The pair's bullish outlook is expected to be challenged below its 200-day SMA, today at 1.0845.
The 4-hour chart indicates that the consolidative attitude in spot is likely to persist. In the event of a break above this theme, the first resistance level is around the 200-SMA at 1.0919 prior the 100-SMA at 1.0943 ahead of 1.0998. The MACD has recovered somewhat, and the RSI retreated to the 46 zone. On the downside, immediate contention emerges at 1.0844 prior to 1.0723.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.