On Thursday, the EUR/USD pair maintained its upward trend and managed to move above the corrective level of 161.8% (1.0609). The hourly and 4-hour charts show that the pair has been in a limited price range for a considerable amount of time. Although the movements are now so unpredictable that a new collapse in the direction of Wednesday's low is possible today, the growth process can now be resumed in the direction of the next level of 1.0750.
The results of the upcoming meeting of the European Regulator were made public yesterday. Although traders' expectations were lower a few days prior as a result of major financial issues at Credit Suisse, all three interest rates were lifted by 0.50% as planned. The European Union's banking sector is currently considerably more stable than it was in 2008, according to Christine Lagarde, who also noted that the problems with one bank had no bearing on the regulator's primary objective of bringing inflation down to 2%. Lagarde added that the ECB will now consider incoming macroeconomic data when deciding whether to tighten the PEPP in the future. In other words, we should only anticipate a 0.25 percent increase in May, which would reduce the pace and maybe harm the position of the euro. Overall, the euro hasn't performed too well or poorly over the past two weeks. The announcement of the failure of three US banks caused the euro to rise sharply, but after a few days, it fell after learning about Credit Suisse. Because the regulator had been preparing the markets for such a turn of events, it is obvious that traders had been counting on the ECB president to make more assertive statements and that a rate increase of 0.50% had long been planned. An inflation report was previously provided by the European Union today, but traders weren't impressed. The euro is essentially stationary and unsure of how to respond to a 0.1% slowdown with an ongoing rise in interest rates.
The pair has stabilized under the upward trend corridor on the 4-hour chart, allowing us to continue to anticipate additional declines. The new downward trend corridor, which verges on the idea of "sideways," is confirmed by the traders' "bearish" attitude. In recent times, the horizontal movement has been noticeable rather frequently.
Report on Commitments of Traders (COT):
Speculators concluded 1,322 short contracts and 160 long contracts during the most recent reporting week. The positive sentiment among large traders is still present and getting stronger. I want to call your attention to the fact that the most recent report we have is from February 21. The "bullish" sentiment may have grown stronger in February, but how are things now? Speculators now have 236 thousand long contracts, while just 71 thousand short contracts are concentrated in their hands. While the value of the euro has been declining for some weeks, we are currently without new COT data. The likelihood of the euro's growth has been steadily increasing over the past few months, much like the euro itself, but the information background hasn't always backed it up. After a protracted "dark time," the situation is still in the euro's favor, and its prospects are strong. Until the ECB gradually raises the interest rate by increments of 0.50%, at least.
News calendar for the USA and the European Union:
EU – inflation (10:00 UTC).
US – industrial production (13:15 UTC).
US – consumer sentiment index from the University of Michigan (14:00 UTC).
The European Union and the United States both have significant events scheduled for March 17, but the most significant one (the EU's inflation rate) did not stir up any strong feelings among traders. The background information's impact on traders' attitudes for the remainder of the day will be minimal.
Forecast for EUR/USD and trading advice:
On the hourly chart, new sales of the pair with targets of 1.0526 and 1.0483 can be initiated when the price closes below the level of 1.0609. On the hourly chart, purchases of the euro were likely if it closed above the level of 1.0609 with a target of 1.0750.