© Dukascopy Bank SA
Mario Draghi's comments were the main driver for the most traded currency pair last week, as after refreshing this year's high at 1.3967, the pair plunged back to last week's low at 1.3845. Despite being highly volatile, the pair is still trading in boundaries of a channel up pattern on a 4H chart and rising wedge on a daily chart. Nevertheless, the pair is trading close to the upper boundary of the rising wedge pattern that can be found at a weekly R1 at 1.3972. Despite a minor move to the north this week, the pair is fluctuating around a weekly pivot close to strong psychological at 1.39.
Despite the fact the EUR/USD currency pair has been trading in a strong uptrend since July, this week's outlook is bearish. Dukascopy Community members see the pair closing at 1.3866 this Friday, March 21. This level is just 20 pips below last week's average price and slightly below the weekly pivot, suggesting a close behind this level will indicate further correction or even a beginning of a new trend to the downside.
Despite the fact market sentiment is strongly bearish, with 69% of opened positions being short, and the single currency being sold in 64% of all cases across the board, technical indicators are sending ‘buy' signals. At the same time, 54% of respondents are having bullish sentiment on the pair.
This week's highlight is the FOMC meeting, as during the first meeting under Janet Yellen, policymakers can shed light on the rate hikes. It is widely expected they will make another $10 billion adjustment to its stimulus programme, however, any hints on the higher rates, will push the pair significantly lower. "Fundamentally, FOMC meeting is scheduled in which tapering is likely to be continued. Also, week is going to end with Fed's members' speeches, which is expected to boost positive sentiments for the U.S.," said Sankit.
© Dukascopy Bank SA