General analysis EURUSD for 10.03.2022
Current dynamics
The EUR/USD is moderately declining on Thursday after a record rise the previous day. On Wednesday, the European currency strengthened thanks to signals of an imminent ceasefire in Ukraine. Kiev is ready to make concessions and discuss the neutral status of the country with Russia, but is not ready to meet all the conditions of the Russian side. The information background around the negotiations of the main parties to the conflict is changing dramatically, so we cannot be sure of either a de-escalation of the conflict or the formation of an uptrend on EURUSD.Also worth considering is the fact that speculators have been actively selling the euro for a long time, increasing pressure on the trading instrument. When the price reached a two-year low the number of short positions declined considerably, which supported the pair, however fundamental data and geopolitics continue to be the key drivers for the market in the medium term.The ECB held its monetary policy meeting today. The regulator expectedly kept its key rate and was very cautious in its comments. The Governing Council revised the APP asset purchases schedule for the next 3 months. The monthly net purchases of APP will now amount to 40 billion euros in April, 30 billion in May and 20 billion in June. If the medium-term inflation forecast reaches the 2% target, the ECB will abandon the APP in the third quarter of this year. Otherwise the Governing Council will revise the timetable. Likewise, the regulator noted that it plans to roll back the PEPP at the end of March. Monetary policy could be revised only after the APP is phased out. The ECB has thus reverted to cautious rhetoric in the belief that flexibility and frequent reviews of the parameters of the quantitative easing policy will keep the European economy stable.
Tomorrow at 09:00 (GMT+2), Germany will publish consumer price index statistics. The European Union leaders' summit will begin at 12:00 (GMT+2).
Support and resistance levels
On the 4-hour chart, the instrument is testing a strong support level of 1.1000. Bollinger Band indicator. The indicator is pointing upwards and the price range is not significantly reduced, indicating a change in the current trend. The MACD histogram has moved upwards in the positive zone, indicating that an uptrend is forming. Stochastic is preparing to enter oversold area, a strong buy signal is expected within 1-2 days.
- Support levels: 1.0805, 1.0890, 1.0960, 1.1010.
- Resistance levels: 1.1060, 1.1125, 1.1165, 1.1220.
Trading scenarios
- Long positions can be opened at the current price with a target of 1.1060 and a stop loss at 1.0945. Implementation period: 1-2 days.
- Short positions should be opened below the level of 1.0940 with a target of 1.0870 and a stop-loss at 1.0965. Implementation period: 1-2 days.