- EUR / USD briefly tests lows in the 1.1870 region.
- Buying tone around the dollar remains firm.
- The results of the current account of the euro area and a speech from the ECB stand out on today’s economic calendar.
The common currency manages to reverse the initial pessimism and now raises the EUR / USD pair back to the 1.1900 region.
EUR / USD risks a dip to the 200-day SMA
EUR / USD alternates profit and loss at the beginning of the week. The pair recovers from initial lows in the 1.1870 area and it recovers to the 1.1900 region after two consecutive daily setbacks.
In the meantime, Buying interest around the dollar remains firm and continues to weigh on the pair in a context still dominated by the strong expected recovery in the US economy and rising yields Americans, supported by prospects for higher inflation in the coming months.
What’s more, the low rate of the vaccination campaign in the Old Continent it continues to cloud the region’s growth prospects and adds to the sales posture around the common currency.
In the economic calendar of the euro area, the publication of the current account figures for January before the speech of the member of the Board of the ECB, I. Schnabel, stands out.
Across the Atlantic, the Chicago Fed National Activity Index and February Existing Home Sales will be released during today’s American session, followed by speeches by Fed Chairman J. Powell and the speeches by R. Quarles and M. Bowman of the FOMC.
What can we expect around the EUR?
EUR / USD keeps the bearish consolidation theme unchanged and is still supported by the critical 200-day SMA near 1.1850. The strong and persistent stance of the US dollar has been weighing on the pair’s earlier constructive view in recent weeks, as market participants continue to value higher US yields and the superior performance of the US economy against others. G-10 countries. However, the firm hand of the ECB (despite some verbal concerns) in combination with the expected rebound in economic activity in the region in the post-pandemic stage will likely prevent a much deeper pullback in the pair.
Key Eurozone Events This Week: Preliminary PMI for the month of March, preliminary consumer confidence (Wednesday) – European Council meeting (Thursday and Friday).
Eminent Background Issues: Possible action by the ECB to slow the rise in European yields. The appreciation of the EUR could trigger a verbal intervention from the ECB, especially in the future context of moderate inflation. Likely political turmoil around the EU Recovery Fund.
EUR / USD technical levels
At the time of writing, the EUR / USD pair is shedding 0.03% on the day, trading at 1.1897. The next support is at 1.1870 (March 22 low), followed by 1.1846 (200-day SMA) and finally 1.1835 (March 9 low). On the other hand, a breakout of 1.1989 (March 11 high) would target 1.2058 (50-day SMA) on its way to 1.2113 (March 3 high).
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