Home Daily Analysis EUR/USD Technical Analysis: March 08, 2019

EUR/USD Technical Analysis: March 08, 2019

The EUR/USD continues losing ground on the back of the dovish ECB’s announcement and the pair is trading currently below 1.1200 level. The European Central Bank announced this Thursday that it will keep the interest rates at their present levels at least through the end of 2019. Some members wanted a longer pushback to March 2020 but this was not accepted. The ECB downgraded its 2019 growth forecasts and the risk surrounding the euro area growth outlook have moved to the downside. It is also important to mention that the policymakers announced a new series of quarterly targeted longer-term refinancing operations (TLTRO-III), which will be launched in September 2019 through March 2021. This will provide additional cheap money to banks but according to some analysts this decision was a “panic move.” The US will release Nonfarm Payroll report this Friday and this will be the main event for the end of this trading week. The US economy is expected to have added 180K new jobs in February which is very good and in line with expectations. The US economy is still doing good in terms of growth but some Fed members warned that economic growth in the US could slow this year. The pair needs to fall below 1.1100 level to extend moves lower and according to the current market sentiment, the direction for EUR/USD remains „bearish“.

Technical analysis

The EUR/USD pair has weakened this Thursday below 1.1200 level and the pair is trading currently around 1.1190. The ECB´s President Mario Draghi said at this monetary meeting that the economic growth in the EU is decelerating and the inflation is still below expectation. Draghi added that the measures taken are meant to support inflation and that he believes that this will have a positive influence on economic growth. The probability of a recession in the EU is still low but developments in the union are far from encouraging. On this chart, I marked support and resistance levels – 1.1300 and 1.1400 represent the current resistance levels, 1.1150 and 1.1100 are current support levels.

Recommendation: The US will release Nonfarm Payroll report this Friday and this will be the main event for the end of this trading week. According to the technical analysis, the direction for EUR/USD remains bearish. If the price falls below 1.1100 that could be a very good opportunity for the short- term traders, short-term traders can put the stop loss at 1.1115 and take profit at 1.1070 or below. If the price jumps above 1.1300 it would probably reach 1.1330 level very soon, the next target could be located around 1.1350.

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