Fundamental view:

Euro managed to erase some of its previous week’s losses and ended trading around 1.1370 level. Headlines of Russia – Ukraine crisis dominated the financial markets, but it did not show any peace talks progress. However, during the first half, Optimism over a probable truce between the two gave sigh of relief to risk-sensitive currencies such as the Euro. US Federal Reserve monetary policy decision also acted as a major catalyst in driving the market which helped the US dollar. The Fed has increased fund rate by 25 basis points to 0.50% for the first time since 2018 and meet the market expectation, the bank has hinted at seven rate hikes in 2022, that is, one at each remaining monetary policy meeting, and affirmed the commitment to start reducing its $9 Trillion balance sheet after their next meeting. 

Russia wishes to find a diplomatic solution if Kyiv recognizes the independence of the Donbass region through the creation of the People’s Republics of Donetsk and Luhansk. Whereas on contrary, Ukraine made it clear that they would not negotiate “an inch of Ukrainian territory,” according to one of President Zelenskyy’s aides, Ihor Zhovkva.

In this week, US Core Retail Sales monthly report on 15^th March and Eurozone Trade Balance n.s.a. on 18^th March favored downtrend whereas Eurozone HICP monthly report on 15^th March and US Building Permits and Initial jobless claim on 17^th March favored the uptrend for the pair.

The major economic events deciding the movement of the pair in the next week are Fed Chair Powell Speech at Mar 21, ECB Non-monetary Policy Meeting, EIA Crude Oil Stocks Change at Mar 23, US Core Durable Goods Orders monthly report, Initial Jobless Claims at Mar 24, Eurozone Ifo Business Climate, Michigan Consumer Sentiment and Fed Governor Waller Speech at Mar 25.

EUR/USD Weekly outlook:

Technical View:

Last week’s high was 0.15% higher than the previous week. Maintaining high at 1.1137 and low at 1.0900 showed a movement of 237 pips.

In the upcoming week we expect EUR/USD to show a bullish trend. The currency pair is trading above the 100 Simple Moving Average and the MACD trades to the upside. A solid breakout above 1.1156 may open a clean path towards 1.1265 and may take a way up to 1.1393. Should 1.0919 prove to be unreliable support, the EURUSD may sink downwards 1.0791 and 1.0682 respectively. Chart formation of a rounding bottom pattern in H4 chart sets prospects for a bullish trend. Three outside up pattern formation in H4 chart escalates the expectation for a bullish trend.