EUR/USD – H4
Poor sentiment prevailed during the prior week, mostly due to geopolitical tensions and aggressive expectations around the Fed's tightening prospects, which weighed on the pair.
The new one begins with the same themes in the spotlight and the Fed's Wednesday monetary policy decision looming large. The monetary policy differential between the European Central Bank (ECB) and its US counterpart remains unfavorable for the pair, as the Fed is widely expected to end its QE and increase its interest rates as soon as March.
Furtermore, Europe is vulnerable to high energy prices and the situation in Ukraine can make things bad. Fears of war in the region continue to mount and Russia-US relations persist, as the latter ordered the departure from its embassy in Kyiv of all family members of US Government employees.
EUR/USD is on the back foot and vulnerable to further decline towards mid-1.1200s, but it may be early for bears to threaten 1.1185.
On the other hand, if the common currency can defend the ascending trend-line for November's 2021 lows (at around 1.1300) it may get the chance push for 1.1360, but it does not inspire confidence for a rebound towards 1.1435.
Markets now await preliminary PMIs from the US, while the pair's trajectory expected to be determined by market sentiment, so we will wait to see in what mood will NA traders enter.
Past Performance: Past Performance is not an indicator of future results.
Senior Market Specialist
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.