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विदेशी मुद्रा विश्लेषण

Fundamental analysis

23.03.202604:04 विदेशी मुद्रा विश्लेषण और समीक्षा: Overview of the EUR/USD Pair. Week Preview. What Surprises Will the New Week Bring?

The EUR/USD currency pair attempted to extend its nascent upward move on Friday, but did so poorly. At the same time, the British pound plummeted, without any particular reason for it. Thus, after the previous week, traders received important information from central banks, which opened the door for the bulls. However, the bulls themselves may not be willing to enter these doors, and those doors could be blocked on the other side by geopolitical events.

Essentially, the ECB has given the green light for tightening monetary policy, unlike the Fed. Therefore, the growth of the euro would be entirely justified in the near term, based on both fundamentals and the technical necessity for correction. But will these factors have any significance for the market? Over the weekend, Donald Trump announced that if Iran does not unblock the Strait of Hormuz within 48 hours, America will deliver devastating strikes on energy facilities. For some reason, we believe that Iran will not unblock the Strait of Hormuz under pressure from threats, as Tehran has repeatedly shown that it is not afraid of threats and has nothing to lose. Thus, as early as Monday or Tuesday, the United States could launch new strikes on Iranian infrastructure, and what follows next is probably clear to everyone.

There will likely be a series of retaliatory strikes against oil and gas infrastructure in the region and against American military bases. Once those targets are exhausted, Iran will begin striking from longer distances. Just recently, Iran attacked an American military base located more than 2,000 km away. Thus, Tehran has the necessary missiles for long-range strikes. This marks a new escalation in the conflict and potentially expands its geography to include attacks on European countries.

Consequently, regardless of geopolitical conditions or the macroeconomic backdrop, the dollar could resume rising at any time. Of course, we, like all reasonable people, hope that the situation in the Middle East does not worsen further. Otherwise, oil prices could indeed rise to $200 per barrel. However, the main peacemaker of modern times, Trump, continues to see Iran as the main threat to the world and himself as the savior of the world from the Iranian threat.

Trump can end this war at any moment, but what would that change? Iran is not willing to end the confrontation. Trump has stirred up a hornet's nest and is now desperately pretending to seek to unblock the Strait of Hormuz and end the conflict—another good face in a bad game. Thus, if it were not for geopolitics, we would expect only growth in the euro, as before. But in this case, it is crucial for traders to constantly monitor news from the Middle East to be prepared for a new decline in the EUR/USD pair.

The average volatility of the EUR/USD currency pair over the last 5 trading days as of March 23 is 104 pips, which is considered "average." We anticipate movement within the range of 1.1468-1.1676 on Monday. The upper linear regression channel has turned sideways, indicating a trend reversal. The CCI indicator has again entered the overbought area and formed a "bullish" divergence, signaling the potential completion of the downward trend.

Nearest support levels:

S1 – 1.1475

S2 – 1.1353

S3 – 1.1230

Nearest resistance levels:

R1 – 1.1597

R2 – 1.1719

R3 – 1.1841

Trading Recommendations:

The EUR/USD pair has begun to correct and has a chance of recovery. The global fundamental background remains extremely negative for the dollar. However, for over a month now, the market has focused solely on geopolitics, rendering all other factors almost insignificant. If the price is below the moving average, shorts can be considered with targets at 1.1475 and 1.1353. If above the moving average line, long positions remain relevant, with targets at 1.1963 and 1.2085, but for such a move to occur, the geopolitical backdrop must begin to improve even slightly.

Explanations for Illustrations:

Linear regression channels help identify the current trend. If both are directed in the same way, it indicates a strong trend;

The moving average line (settings 20,0, smoothed) determines the short-term trend and direction in which trading should currently proceed;

Murray levels are target levels for movements and corrections;

Volatility levels (red lines) indicate a probable price channel in which the pair will trade over the next 24 hours based on current volatility readings;

The CCI indicator entering the oversold area (below -250) or the overbought area (above +250) indicates that a trend reversal in the opposite direction is approaching.

*यहां पर लिखा गया बाजार विश्लेषण आपकी जागरूकता बढ़ाने के लिए किया है, लेकिन व्यापार करने के लिए निर्देश देने के लिए नहीं |

Paolo Greco,
Analytical expert of InstaSpot
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