Home Daily Analysis EUR/USD Technical Analysis: March 11, 2019

EUR/USD Technical Analysis: March 11, 2019

The EUR/USD closed the last week at 1.1231 which is almost 50 pips away from a new yearly low of 1.1175 that was reached last Thursday. The pair was pressured after the dovish announcement from the ECB last week and it is important to say that the strong bearish trend is still intact. The European Central Bank announced last week 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. 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 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 US has released Nonfarm Payroll report last Friday, the country added just 20K new jobs in February and this was below the market’s expectations. On the other side, the unemployment rate fell to 3.8% while wages increased by more-than-anticipated. 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 last week below 1.1200 level and the pair is trading currently around 1.1231. The ECB downgraded its 2019 growth forecasts and the risk surrounding the euro area growth outlook have moved to the downside. The probability of a recession in the EU is still low but developments in the union are far from encouraging. The US economy remains strong but the main reason why the case for raising rates has “weakened” is the trade war, Brexit and slowing growth in Europe and China. On this chart, I marked support and resistance levels – 1.1300 and 1.1400 represent the current resistance levels, 1.1200 and 1.1100 are current support levels.

Recommendation: According to the technical analysis, the direction forEUR/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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