On Tuesday, March 8, in the European session, EUR/USD is trying to recover some of its previous losses.
- EUR/USD recovers in the European session, trading just below the 1.0900 level.
- As a result of fewer headlines about the Ukraine conflict, investors’ risk appetite has increased marginally.
- This week’s huge ECB interest rate policy event has investors’ attention.
EUR/USD fundamental forecast
After six straight selling sessions, the EUR/USD attempted to recover in Asia. Still, in the European session, the EUR/USD managed to register good gains and leave behind six consecutive sessions of losses, as market players seem to prefer the risk-associated environment.
Russian-Ukrainian war weighs in
On Monday, the third round of talks between the Russian and Ukrainian delegations failed to agree on a possible ceasefire. As a result, it allowed safe-haven flows to dominate the markets in the second half of the day.
Investors are increasingly afraid that a protracted confrontation between Russia and Ukraine could push commodity prices even higher, producing stagflation in the Eurozone.
Aside from that, the European Union (EU) is considering a two-thirds reduction in Russian gas imports per year, in line with the US decision to ban oil imports from Russia.
Euro economy booms
According to Eurostat figures released on Tuesday, seasonal adjusted GDP in the Euro area increased by 0.3 percent every quarter in the fourth quarter.
This result was consistent with the initial forecast and market expectations. In addition, GDP increased by 4.6 percent compared to the same quarter the previous year.
These figures don’t appear to significantly impact the shared currency’s success compared to its competitors.
DXY blues
Meanwhile, the DXY has dipped at 99.00 following a minor increase in market participants’ risk appetite. Furthermore, investors are cutting their positions ahead of the US Consumer Price Index (CPI) statistics.
Key data releases from Europe
The common currency has a busy week ahead of it. But, first, investors will focus on the big event of the European Central Bank’s (ECB) interest rate announcement, which is due on Thursday, after the release of GDP statistics and Employment Change data on Thursday.
Key data releases from the US
The US economic calendar will include the January Goods Trade Balance and the March IBD/TIPP Economic Optimism Index.
What’s next?
In the long run, rumors of an ECB interest rate hike, perhaps sooner than many expect, higher German rates, persistently high inflation, the reasonable speed of the economic recovery. In addition, positive findings from important fundamentals in the area should support periodic strength in the pair.
EUR/USD technical analysis: slight recovery, but for how long?
EUR/USD is now trying to stay above the 1.0850 level. So far, the pair has gained 0.19%. The pair is below its 100-day moving average on the daily chart, and the RSI is pointing downwards.
EUR/USD is now hitting the 1.0870 level. A fall below 1.8050 will bring the pair towards the 1.0766 support level. If the pair falls below this level again, it will challenge the next support level, at 1.0727.
On the upside, the Fiber can go towards the next resistance level, around 1.1000. A break over the resistance level of 1.1293 will pave the door for a test of the following resistance level of 1.1395.
