© Dukascopy Bank SA
Last Friday on the back of stronger-than-excepted CPI data from Europe and disappointing growth figures from the United Stated, the most traded currency pair soared to 1.3825, hitting the highest since December 27. With a bunch of high importance economic releases later this week the EUR/USD couple is projected to be highly volatile, but will it manage to stabilize above 1.38 or the pair will be pushed back to a weekly S1 at 1.3670?
According to Dukascopy Community member, the second scenario is more probable, as 61% of respondents are bearish on the pair, while the consensus forecast stands for 1.3720– just slightly above the crucial psychological level of 1.3700. Despite bearish outlook, this level is just 9 pips below the last week's average price. At the same time, 60% of all Dukascopy traders are holding short positions on the pair, while 54% of pending orders in a 100-pip range are placed to sell the Euro against the greenback.
Amid growing tensions in Ukraine investors rushed to buy the U.S. Dollar, considering it as one of the safe-haven, pushing the pair lower. Moreover, trader Rokasltu believes that positive impact from Friday's inflation report will be short-lived, hence the pair will depreciate.
From the perspective of technical analysis, the ascending triangle pattern that was formed in the middle of 2011, is moving to its apex, and in March or April the pair is projected to be extremely volatile. "I think when the pair faces the 1.3820 resistance, it will be pressed by the selling pressure near this level, so I suggest EUR/USD will not break 1.390 this week and may face some retracement." Therefore, only hawkish comments from Mario Draghi on Thursday, or disappointing payrolls and unemployment rate from the U.S. will be able to push the EUR/USD pair above 1.3825.
© Dukascopy Bank SA