EUR/USD Forecast: Breaking the balanced trading - it's Draghi-dependent

• The EUR/USD is trading higher again, but well within the well-known range.
• Central bank chiefs, Draghi first and then Powell, are due to set the tone.
• The technical picture is balanced but slightly bullish.

The EUR/USD is trading around $1.2330, still slightly higher on the day, but below the peak of $1.2354. The pair moved higher, mainly driven by the weakness of the US Dollar, that in turn, slipped to lower ground alongside US bond yields. As the greenback recovered across the board, so did the pair, but there was another minor reason for the retreat from the highs.

The Greek crisis may be waking up, albeit remaining at the backburner. The Governor of Greece's central bank says that they may consider a precautionary support program. Such a safety may be in need after the current plan, the third one, expires. Markets have mostly forgotten about the debt-struck country, but the story never entirely ends. 

In addition, there are some worries about the future of Germany's coalition. Members of the center-left SPD, the junior coalition partner, are voting in a postal ballot about the participation in another Grand Coalition (GroKo in German). The results will be announced on Sunday and an approval is on the cards. However, there is no certainty in this either.

Looking forward, ECB President Mario Draghi testifies before the European Parliament shortly. Draghi is expected to reiterate the strong growth but slow inflation. The balance between growth and inflation is the key. An emphasis on the robust growth could push the euro higher while worries about low inflation could weigh on the common currency. We will get the Flash CPI Estimate for February on Wednesday. 

More importantly, Fed Chair Jerome Powell will make his first testimony on Tuesday and tension is mounting. Markets will try to understand if he is a dove or a hawk and whether the Fed will raise rates more than three times this year. Nothing is entirely priced in, and Powell could break the current balance in EUR/USD.

EUR/USD Technical Picture - Slight bullish bias

The EUR/USD is trading in a narrow range for the past three days: between $1.2260 and $1.2350. This see-saw, repeated over and over again, does not mean that a wider trend cannot be identified. The pair is still trading in an uptrend that is clear to see. The purple line on the chart marks the latest uptrend support line that is part of the broader uptrend.

Moreover, the EUR/USD is trading above the 50-day SMA and well above the 200-day SMA. The RSI is slightly higher, and downside momentum has waned. All in all, the picture is bullish for the pair.

On the upside, $1.2375 was a low point in mid-February and could serve as a weak line of resistance. $1.2450 capped the pair when it was trading on higher ground in January and in February. The 3-year high of $1.2555 is the last line to watch.

Looking down, $1.2260 was the low seen last week, and it also matches the uptrend support line. This key confluence is of high importance to the downside. Further below, $1.2205 was the low point in early February and is also a strong line of support. The $1.2160 trough of early January is another line to watch.