10.03.202213:27 Forex Analysis & Reviews: EUR/USD analysis and forecast for March 10, 2022

At yesterday's trading, the main currency pair of the Forex market showed impressive growth. And this is on the eve of the meeting of the European Central Bank (ECB), followed by a press conference by the head of this department, Christine Lagarde, as well as with Russia's ongoing military special operation in Ukraine. Did the market believe in changing the ECB's rhetoric in the direction of tightening it and settling the conflict between the two fraternal, Slavic peoples? Let's speculate. As for the ECB, there are still no clear signals from the European regulator about the timing of the start of tightening its monetary policy. Meanwhile, inflation in the area of circulation of the single European currency is still too high, and something needs to be done about it. It is already clear that it will not work just to sit and wait for inflation by itself to fall to the target drop of the European Central Bank of 2%, because it is completely unknown when this will happen, and indeed whether it will happen by itself, without tightening the ECB monetary policy. Moreover, now the situation is complicated by the situation in Ukraine, where the Russian Federation is conducting its military special operation.

Regarding the situation in Ukraine, if the author's memory does not change, another round of negotiations between the two sides should take place today. It is difficult to say whether it will bring any positive results. In this situation, it will be very difficult for the parties to find a compromise acceptable to all. This requires a special political will and a great desire. However, let's hope for the best. Everyone needs peace, including European partners, who themselves will suffer to a large extent from the sanctions imposed against Russia at the behest of the United States. First of all, this concerns the cessation of the use of Russian gas and oil. Nevertheless, I would like to emphasize once again that, since the current situation does not suit anyone, everyone is interested in establishing relations between Kyiv and Moscow as soon as possible and ending the military special operation. However, let's return to the main event of today, and, perhaps, the whole week.

So, at 12:45 London time, the ECB will make its decision on interest rates. Since no changes are expected here, the main moment for market participants will be the press conference of ECB President Christine Lagarde, which will begin at 13:30 (London time). The tightening of the rhetoric of the head of the European Central Bank will support the single currency, and it will continue its yesterday's growth against the US dollar. Otherwise, the euro may come under selling pressure. But that's not all of today's events. Simultaneously with Lagarde's press conference, important reports on initial applications for unemployment benefits and much more important releases on changes in consumer prices will be received from the United States. So, as you know, today will be another day. There is no doubt that these events will have a serious impact on the price dynamics of EUR/USD, but for now, we will see what is happening on the price charts at the time of writing this article.

Daily

Yesterday's rather strong growth of the pair can be called corrective with a big stretch. A hefty bullish candle with a closing price above the Tenkan red line, at 1.1076, clearly demonstrates that the euro bulls have come to their senses and are ready for further confrontation with their opponents. At the end of this article, the euro/dollar is trading with a slight decrease, near the level of 1.1062. If the upward dynamics continue, the pair will head to the previously broken support level at 1.1122, and the blue Kijun line of the Ichimoku indicator, which is located at a strong technical level of 1.1150, will be the longer-term goal of the players to increase the rate. In a downward scenario, EUR/USD may return to the resistance broken yesterday and the highs of March 8, 1.0958. On such eventful days, it is always difficult to give any specific trading recommendations. And yet, judging by the technical picture, at the moment, the continuation of growth seems most likely. For those who want to open new positions on EUR/USD today, I recommend taking a closer look at purchases after short-term declines in the areas of 1.1035 and 1.1010. If bearish reversal candles appear in the price zone 1.1090-1.1110 at smaller time intervals, this will be a signal to open deals for sale.