EUR/USD Weekly Analysis for March 8-12

The EUR/USD currency pair dived to a fresh low of 1.1892 last week, though few pips slightly went above the level. The dollar increased after the comments of Jerome Powell, Chairman of US Federal Reserve.

Jerome Powell while interviewed on a live broadcast on Thursday, affirmed that the greenback is gaining strength but emphasized that progress is still ongoing as regards employment and inflation rates. He opined that a hike in rates is unlikely until inflation exceeds 2% which is not presently foreseeable. As regards treasury yields, he mentioned that they are needed before the present monetary policy is changed, citing progress made in employment and inflation area.

Following President Joe Biden's speech that Coronavirus vaccines will be given to every adult American before May ends, analysts are hopeful that this will revive the economy, lift inflation, which will compel the Feds to raise rates and tighten QE.

As regards European economy, the figures have been troubling as Lockdowns are still enforced, with several countries extending it to April. The retail sales of January, took a dive in Germany and EU while the service sector has been contracting. The slow rate of Covid Immunization is definitely behind the gloomy reality.

This week (March 8-12), the decision of European Central Bank as regards monetary policy will be instrumental. The policymakers are likely to hold down the rates. The European Union is expected to publish its revision of Gross Domestic Products, while Germany on the other hand, will publish Industrial Production for January and Inflation rates for February.

In US, the target will be to release data on employment and inflation while on Friday, it will go ahead to release the index for March Michigan Consumer Sentiment.

Technical Analysis

The EURUSD currency pair has experienced downward movement for two consecutive weeks and is likely to tow that same path again. The pair is gradually getting close to the 61.8% retracement we saw in November/ January Market at 1.1885. The weekly chart shows that the risk turned southward as the currency pair broke through the 205 SMA which is its first time this year.

Technical indicators show a downward movement as the Midline is being defied by the intense momentum. The RSI is currently pegged at 49 which hints on likelihood of the other leg going south.

The technical analysis of the daily chart shows that the bearish trend will continue as the indicators continue the downward movement beside the oversold analysis. The pair has experienced failure while trying to recover from Choppy 205 SMA and thus, broke under the 100 SMA.

Aside 1.1885, the subsequent support level is 1.1800, after which, it is 1.1745. Presently, the resistance is pegged at 1.1970, and thereafter, it is 1.2060.

Sentimental Analysis

According to the sentimental poll we carried out, there are strong indications that the currency pair may continue falling this week (March 8-12), this is because, 62% of experts‘ polls confirmed its bearish nature. The minimal target is 1.1908. However, there was a bullish leap from the last month’s 13% to 71% this month. Thus, the pair is expected to go down to 1.2000 next week.

From our overview chart, the moving averages of the monthly and weekly trades have assumed a downward position while trades of long-terms maintained neutrality.