Fundamental Analysis
The EURUSD pair has recently surged, surpassing the 1.09 mark, driven by growing concerns of a US recession that have weakened the dollar. These fears intensified after Citigroup downgraded US stocks to neutral, citing bearish market signals. Additionally, uncertainty surrounding US trade policies—including new tariffs set to take effect on April 2—has caused market jitters on Wall Street and contributed to dollar volatility.
Meanwhile, the euro has strengthened, reaching its highest level since November, supported by a slight recovery in European markets and a shift in ECB President Christine Lagarde’s stance, highlighting the risks the European Union faces due to US trade policies.
Market attention is now focused on the US Consumer Price Index (CPI) data, set to be released tomorrow, March 12. February’s annual inflation rate is expected to slightly decline to 2.9% from January’s 3%, though it remains above the Federal Reserve’s 2% target. This report is crucial ahead of the Fed’s March 18–19 policy meeting, as persistently high inflation could limit the central bank’s ability to implement further stimulus amid growing economic concerns. Additionally, food prices have shown significant increases, with expectations of a 0.6% rise in February, which could influence monetary policy decisions. Investors will be closely monitoring this data to assess the future direction of the dollar and the EUR/USD pair.
Technical Analysis
EURUSD, H4
Supply Zones (Sell): 1.10
Demand Zones (Buy): 1.0855 / 1.0765 / 1.07
Price continues to rally past 1.09, activating 1.0805 as the last validated intraday support and forming a volume concentration around 1.0855. This level acts as a local demand zone, potentially triggering new buy orders to push the pair towards November’s resistance at 1.0937 and ultimately testing the key psychological level at 1.10.
This bullish scenario may gain traction if the upcoming CPI data confirms a decline. However, if inflation data surprises to the upside—exceeding market expectations—the price could fall towards the last validated intraday support at 1.0805. A confirmed break below this level would signal a trend reversal.
Technical Summary
- Bullish Scenario: Buy positions above 1.0855 with targets at 1.09, 1.0940, 1.0950, and an extended move to 1.10.
- Bearish Scenario: Sell positions below 1.10 as a correction towards 1.0950. Additionally, early sell signals if the price drops below 1.0950, extending declines to 1.08, with further downside potential towards 1.0765 and 1.07.
Discovered POC (Point of Control):
The POC is the price level with the highest volume concentration. If a previous bearish move originated from this zone, it acts as a resistance (sell zone). Conversely, if an upward impulse began there, it serves as a support (buy zone), typically located at lows.
