General analysis EURUSD for 15.03.2022
Current dynamics
This week EUR/USD is moderately strengthening amid negotiations between Russia and Ukraine, as well as declining energy prices. Weak data on industrial production in the Eurozone published today, as well as a drop in economic sentiment among investors in Germany did not have a significant negative impact on the pair. Given the conflict in Ukraine, as well as the unprecedented amount of sanctions against Russia, which is one of the EU's key economic partners, the released data did not come as a surprise to market participants.At the same time, traders are actively supporting the pair after declining to local lows. The short-term speculative trading strategy has been working quite well in recent days. However, this approach is very dangerous, given the geopolitical risks, as well as strong volatility in the energy market. The pair reacted positively to reports from Washington that a diplomatic solution to the Ukrainian issue is imminent. However, Investizo believes that the end of hostilities will not come before the end of April, so a recovery of the European currency looks unlikely in the medium term.Another significant driver for the strengthening of the trading instrument is the closure of major Chinese industrial centres due to the outbreak of coronavirus. Shenzhen accounts for 11% of total GDP and 23% of China's exports. Thanks to the introduction of a one-week lockdown, the energy market has gone down sharply. For Europe the fall in energy prices is a positive development as the energy crisis and high hydrocarbon prices have increased price pressures.
Today at 14:30 (GMT+2), the US will release macroeconomic statistics on producer prices. At 17:15, ECB head Christine Lagarde will start her speech. Traders expect to hear more about the European regulator's plans on monetary policy. Wednesday's key event is the announcement of the Fed's interest rate decision.
Support and resistance levels
On the 4h chart, the instrument is testing the strong resistance level of 1.1000. The Bollinger Band indicator is turning downwards and the price range has contracted, indicating that a downtrend is forming. The MACD histogram is in the neutral zone, confirming the presence of corrective dynamics. Stochastic is preparing to enter overbought area, a strong sell signal is expected within 1-2 days.
- Support levels: 1.0820, 1.0890, 1.0970.
- Resistance levels: 1.1010, 1.1045, 1.1095, 1.1185, 1.1250.
Trading scenarios
- Long positions can be opened above the level of 1.1025 with a target of 1.1090 and a stop-loss at 1.0995. Implementation period: 1-2 days.
- Short positions should be opened below the level of 1.0960 with a target of 1.0890 and a stop-loss at 1.0985. Implementation period: 1-2 days.