Chart Of The Week: EUR/USD ripe for a u-turn, depending on ECB

Breaking key trendline resistance, EUR/USD stalls at long term POC ahead of ECB.
Buyers could be seen stepping in on a pullback for a 23.6% Fibonacci retracement.

Ross J Burland FXStreet

This week has the opportunity to prove to traders that markets have the ability to defy all odds. EUR/USD has rallied in its single biggest weekly jump since 2016.

As explained in last week's analysis, where the market proved its ability to mock even the most plausible analysis, despite the presumption that the euro's rally was due a correction, it had the ability to continue to test the weekly trendline. Well, not only did it continue to test and break the weekly resistance in the late 1.11 handle, EUR/USD went on to score a high of 1.1356, an additional 1.5% tot he 2018 point of control. The question now is how far can this rally continue without seeking liquidity back to the downside, as liquidity is starting to look sparse at this juncture.

Looking to EUR/USD's volume profile since June 2019, there was a lack of liquidity between 1.1400 and 1.1300 with the ATR higher within 1.4-1.12. Sharp daily declines and wider ranges into 1.1220 make for a likely level of equilibrium for EUR/USD today for which buyers could be seen stepping in on a pullback for a 23.6% Fibonacci retracement. Below there, the point of control of he Feb rally and carry trade unwind, is located at 1.1127, correlating with a 38.2% Fibo target.

On the other hand, should the European Central Bank disappoint, ( instead of cutting interest rates, seen looking at targeted measures to support corporate and SME lending, e.g. a TLTRO targeting the corporate sector), the rally market could easily be seen headed to 1.1450 (as per volume profile of the 2018 downtrend) on expectations that the Federal Reserve will cut rates by a further 50 basis points on March 18th.

EUR/USD awaits ECB through weekly trendline

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

EUR/USD tests nine-day EMA support near 1.1850

EUR/USD inches lower during the Asian hours on Monday, trading around 1.1870 at the time of writing. The 14-day Relative Strength Index momentum indicator at 56 stays above the midline, confirming improving momentum. RSI has cooled from prior overbought readings but stabilizes above 50, suggesting dips could stay limited before buyers reassert control.

GBP/USD flat lines as traders await key UK macro data and FOMC minutes

The GBP/USD pair kicks off a new week on a subdued note and oscillates in a narrow range, just below mid-1.3600s, during the Asian session. Moreover, the mixed fundamental backdrop warrants some caution for aggressive traders as the market focus now shifts to this week's important releases from the UK and the US.

Gold buyers hesitate amid holiday-thinned trading

Gold trades volatile, but within range, as US, China holidays-led thin trading exaggerates moves. The US Dollar extends range play into the US GDP week, with markets pricing at least two Fed rate cuts this year. Technically, Gold tests key support at $5,000; daily RSI still remains bullish.

Top Crypto Losers: Dogecoin, Zcash, Bonk – Meme and Privacy coins under pressure

Meme coins such as Dogecoin and Bonk, alongside the privacy coin Zcash (ZEC), are leading the broader market losses over the last 24 hours. DOGE, ZEC, and BONK ended their three consecutive days of recovery with a sudden decline on Sunday, as crucial resistance levels capped the gains. Technically, the altcoins show downside risk, starting the week under pressure.

Global inflation watch: Signs of cooling services inflation

Realized inflation landed close to expectations in January, as negative base effects weighed on the annual rates. Remaining sticky inflation is largely explained by services, while tariff-driven goods inflation remains limited even in the US.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.