EUR/USD weakened below 1.1050 ahead of Powell’s speech

• EUR/USD is slightly weaker below 1.1050 on a quiet start to the week, amid a lack of new catalysts.
• The pair is currently caught between support and resistance as it awaits Powell’s comments from the Fed and other geopolitical developments.

The EUR/USD trades weak just below the 1.1050 level on a quiet start to the week, amid a lack of relevant fundamental catalysts to move the market regarding the Russo-Ukrainian war or other major themes (central banks and economy). For now, EUR/USD price action remains capped by the 21-day moving average, which is currently sitting around 1.1080, as has been the case for the last three sessions. But to the downside, an uptrend from previous March lows in the 1.0800 area continues to offer support ahead of last Thursday’s and Friday’s lows just above 1.1000.

So, technically speaking, a continuation of Monday’s contained price action looks like a good bet, although investors will be keeping an eye out for a speech by Fed Chairman Jerome Powell, scheduled to speak from 16:00 GMT. Powell is not likely to deviate from his comments at last week’s post-Fed policy announcement press conference, when the bank raised interest rates by 25 bps for the first time in three years and signaled plans to hike. rates at each remaining meeting this year. That means trading opportunities in the forex market are likely to remain fairly limited for the rest of the day.

Geopolitics is the wild card as peace talks continue between Russia and Ukraine (still no sign of progress towards a ceasefire) and with EU leaders reportedly considering a Russian oil import embargo. . There is an EU Foreign Affairs Meeting on Monday which could produce some headlines on the subject that traders should know about; An EU embargo on Russian oil is a downside risk to the eurozone economy and thus to the euro. Looking ahead to the rest of the week, aside from geopolitics, the main catalysts will be the Fed’s speeches (with policymakers appearing daily) and the US and Eurozone PMIs for March.

Aggressive comments from Fed policymakers James Bullard and Christopher Waller last week prompted increased bets that the Fed could raise interest rates by 50bps at its next meeting, so traders should be on the lookout. watch out for more hawkish comments that could create downside risk for EUR/USD. Meanwhile, the flash PMIs will give an early indication of how the Ukraine war is affecting sentiment. If a bearish combination of negative updates from Russia and Ukraine, weaker-than-expected Eurozone PMIs and dovish comments from the Fed were to cause a break down of the recent EUR/USD uptrend and a move back below 1.1000 would open the door for a retest of last week’s lows at 1.0900

Technical levels