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EUR/USD Bulls to Target $1.085 on ECB Chatter and German Stats

By:
Bob Mason
Updated: Mar 27, 2023, 05:07 UTC

It is a relatively busy day for the EUR/USD. Germany's Ifo Business Climate Index and ECB Executive Board member chatter will draw interest.

EUR/USD Tech Analysis - FX Empire.

In this article:

It is a relatively busy day ahead for the EUR/USD, with the German Ifo Business Climate Index in focus.

Economists forecast the headline Index to decline from 91.1 to 91.0 in March. The timing of the survey will likely dictate the extent of the decline. Rising interest rates, persistent inflation, and banking sector woes will weigh on business sentiment, with fears of a credit crunch supporting a fall in the Business Expectations sub-Index.

Economists forecast the Current Assessment Sub-Index to rise from 93.9 to 94.1 while expecting the Business Expectations Sub-Index to fall from 88.5 to 88.3.

With business sentiment in focus, investors should also monitor ECB member speeches. ECB Executive Board members Frank Elderson and Isabel Schnabel will speak today, with comments relating to the banking sector and influence on monetary policy likely focal points.

EUR/USD Price Action

This morning, the EUR/USD was up 0.10% to $1.07706. A mixed start to the day saw the EUR/USD rise to an early high of $1.07797 before easing back.

EUR/USD finds early support.
EURUSD 270323 Daily Chart

Technical Indicators

The EUR/USD needs to avoid a fall through the $1.0770 pivot to target the First Major Resistance Level (R1) at $1.0828. A return to $1.08 would signal a bullish session. However, the EUR/USD needs hawkish ECB chatter and better-than-expected business survey numbers to support a breakout session.

In the case of an extended rally, the bulls will likely test resistance at the Friday high of $1.08386 but fall short of the Second Major Resistance Level (R2) at $1.0896. The Third Major Resistance Level (R3) sits at $1.1022.

A fall through the pivot would bring the First Major Support Level (S1) at $1.0702 into play. However, barring a data-fueled sell-off, the EUR/USD pair should avoid sub-$1.0650 and the Second Major Support Level (S2) at $1.0645. The Third Major Support Level (S3) sits at $1.0519.

EUR/USD resistance levels in play above the pivot.
EURUSD 270323 Hourly Chart

Looking at the EMAs and the 4-hourly chart, the EMAs send bullish signals. The EUR/USD sits above the 50-day EMA ($1.07479). The 50-day EMA moved away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish signals.

A hold above the 50-day EMA ($1.07479) would support a breakout from R1 ($1.0828) to give the bulls a run at the Friday high of $1.08386 and R2 ($1.0896). However, a fall through the 50-day EMA ($1.0479) would bring the 100-day EMA ($1.07102) and S1 ($1.0702) into play. A fall through the 50-day EMA would send a bearish signal.

EMAs remain bullish.
EURUSD 270323 4-Hourly Chart

The US Session

Looking ahead to the US session, it is a quiet day on the US economic calendar. There are no US economic indicators for investors to consider.

The lack of US stats will leave the EUR/USD in the hands of banking sector-related news and FOMC member commentary.

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

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