EUR/USD Forecast: Euro could remain in range ahead of this week's key events

EUR/USD trades near 1.0850 after closing the previous week marginally higher.
Immediate resistance for the pair aligns at 1.0860.
Fed Chairman Powell will testify later in the week and ECB will conduct policy meeting.

Eren Sengezer FXStreet

EUR/USD benefited from the broad-based selling pressure surrounding the US Dollar (USD) on Friday and closed the week with small gains. The pair holds steady at around 1.0850 early Monday and the near-term technical outlook points to a bullish tilt.

Risk flows dominated the action in financial markets ahead of the weekend and made it difficult for the USD to find demand. US stock index futures trade mixed in the European morning, pointing to a cautious market stance that limits the pair's upside.

Euro price today

The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Japanese Yen.

	USD	EUR	GBP	CAD	AUD	JPY	NZD	CHF
USD		-0.09%	-0.06%	0.08%	0.09%	0.18%	0.07%	-0.05%
EUR	0.08%		0.02%	0.16%	0.17%	0.26%	0.15%	0.03%
GBP	0.06%	-0.03%		0.13%	0.14%	0.24%	0.13%	0.01%
CAD	-0.08%	-0.16%	-0.13%		0.01%	0.10%	-0.01%	-0.13%
AUD	-0.09%	-0.18%	-0.15%	-0.01%		0.09%	-0.01%	-0.14%
JPY	-0.16%	-0.26%	-0.25%	-0.10%	-0.10%		-0.12%	-0.23%
NZD	-0.07%	-0.17%	-0.13%	0.00%	0.01%	0.10%		-0.12%
CHF	0.05%	-0.04%	-0.03%	0.13%	0.14%	0.23%	0.13%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).

The European economic docket will feature Sentix Investor Confidence data for March on Monday. Later in the week, Federal Reserve Chairman Jerome Powell will present the semi-annual monetary policy report and testify before Congress on Wednesday and Thursday. The European Central Bank (ECB) announce monetary policy decisions on Thursday as well.

In the Monetary Policy Report published on Friday, the Fed said that inflation expectations were broadly consistent with the 2% target and reiterated that it would be inappropriate to reduce the policy rate until policymakers have greater confidence that inflation will move sustainably toward the goal.

Ahead of these critical events, investors could refrain from taking large positions.

EUR/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the 4-hour chart holds comfortably above 50 and EUR/USD closed the last five 4-hour candles above the 200-period Simple Moving Average (SMA), reflecting the bullish bias.

On the upside, the Fibonacci 38.2% retracement level of the latest downtrend aligns as immediate resistance at 1.0860. The pair tested this week several times in the second half of February but failed to make a 4-hour close above it. Once 1.0860 is confirmed as support, 1.0900-1.0910 (psychological level, Fibonacci 50% retracement) could be seen as next bullish target before 1.0940 (static level).

1.0820 (200-period SMA) forms first support on the downside before 1.0800 (100-period SMA, Fibonacci 23.6% retracement) and 1.0760 (static level).

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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