07.03.202309:09 Forex Analysis & Reviews: EUR/USD. Overview for March 7. Preview of the week. European GDP and Christine Lagarde's speeches.

The new week began with growth for the EUR/USD currency pair. For the previous week, the price frequently reversed its direction of movement, nearly always surpassing the moving average. We cannot rule out the possibility that this week will see a similar event. There was no justification for the increase in the euro on Monday, at least. Let's discuss the underlying context in greater detail below. We currently have a mild upward trend from a technical perspective. We think the negative trend that started a few weeks ago is still in place because the pair is still trading below the crucial line and inside the Ichimoku cloud on the 24-hour TF.

As was already mentioned, Monday essentially had no noteworthy news or events. The head economist of the ECB, Philip Lane, delivered a speech, and a report on retail sales in the European Union was also released. Philip Lane reiterated everything Christine Lagarde and her colleagues in the "transport shop" mentioned last week as retail sales declined significantly more than traders had anticipated. Hence, there was no justification for the current development of the euro. In addition, there wasn't anything for traders to react to during the day. As a result, we think that Monday's increase in the value of the euro was entirely technical. Following the pair's prolonged decline, an upward correction was necessary, which is what we are currently witnessing. The explanation of what is taking place is kept as basic as possible.

This week is full of significant events, but none of them take place in the European Union.

As there was nothing noteworthy to write about on Monday, we decided to produce a "Preview of the Week" article on Tuesday. It might as well have been released on Wednesday as traders will also have access to some crucial information on Tuesday. The fun will start on Wednesday. The third assessment of the European Union's GDP report for the fourth quarter will be released on this day. The final value is predicted to be between 0 and 1%, and it is doubtful that the third estimate will significantly change from the first or second. Unless this report surprises us in some way, we don't anticipate a response. Christine Lagarde, the head of the ECB, will deliver her subsequent speech on Wednesday as well. We don't expect anything noteworthy from them, though, because members of the monetary committee have already stated their position: the rate will rise by 0.5% in March, and the rate will continue to grow after that. There isn't much else to be said about this. The next event in the European Union this week will be another speech by Christine Lagarde, but this time on Friday evening. We can say the same thing about this event.

As it turns out, there won't be any significant events taking place in the EU this week. Ms. Lagarde might be able to inform the market of something significant, but the likelihood of this happening is low. As a result, traders will be able to focus solely on American data and events. Nonetheless, there appear to be numerous significant events, but in reality, everything revolves around Friday Nonfarm and unemployment. But in the article on the pound/dollar, we'll discuss the American calendar.

As a result, the situation is as follows: the pair must gently adjust upwards before they may begin falling again. In any case, we do not anticipate a significant increase in the pair's value because we think the downturn should last for several weeks or perhaps months in the future.

As of March 7, the euro/dollar currency pair's average volatility over the previous five trading days was 84 points, which is considered "normal." Thus, on Tuesday, we anticipate the pair to move between 1.0599 and 1.0767 levels. A new round of downward movement will be signaled by the Heiken Ashi indicator turning back downward.

Nearest levels of support

S1 – 1.0620

S2 – 1.0498

S3 – 1.0376

Nearest levels of resistance

R1 – 1.0742

R2 – 1.0864

R3 – 1.0986

Trade Suggestions:

The EUR/USD pair has resumed consolidation above the moving average line. Until the Heiken Ashi indicator turns down, you can continue holding long positions with targets of 1.0742 and 1.0767. After the price is fixed below the moving average line, short positions can be opened with a target of 1.0498.

Explanations for the illustrations:

Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction.

Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction.

Murray levels serve as the starting point for adjustments and movements.

Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day.

A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.