Current trend

This week, the EUR/USD pair rose to 1.1370, where it is now consolidating.

The market is in a state of uncertainty amid geopolitical risks and the variability of further actions of the American and European regulators. Investors expect further aggravation of the conflict around Ukraine. It is not yet moving into a military phase, but in the event of a negative development of events, a sharp increase in energy prices and new problems with the supply of components and raw materials are likely. Meanwhile, policy makers in the EU and the US are divided on moving forward with monetary policy, which is also making the market uncomfortable. Most members of the European Central Bank (ECB), led by President Christine Lagarde, are on a wait-and-see basis, believing that inflation will slow down by itself during the year due to the receding of the coronavirus pandemic. The opposition also exists within the regulator, represented by European regulator board member Isabel Schnabel and French central bank governor Francois Villeroy de Galhau. They favor an early end to the emergency bond-buying program with the prospect of further rate hikes. But supporters of tougher policies are still in the minority. US Federal Reserve officials agreed to a rate hike in March but disagreed on how steep it should be. Some members of the regulator (San Francisco Fed President Mary Daly Minneapolis Fed President Neil Kashkari) favor a cautious increase in rates by 0.25%. They are now mainly opposed by the head of the St. Louis Fed, James Ballard. Yesterday, he reiterated the need for drastic measures; otherwise, inflation could get out of control. In general, investors are not yet sure what actions they can expect from regulators in the future.

Support and resistance

The key “bullish” level is 1.1410 (Murrey [3/8], Fibonacci retracement 23.6%), which breakout allows growth to 1.1475 (Murrey [4/8]), 1.1560 (Fibonacci correction 38.2%). A downward of Bollinger bands middle line and 1.1290 (Murrey [8/8]) allows a decline to 1.1145 (0.0% Fibonacci retracement).

Resistance levels: 1.1410, 1.1475, 1.1560.

Support levels: 1.1290, 1.1230, 1.1145.