- The EUR/USD is trading around $1.2340 and looking quite steady.
- Uncertainty about Italy's political future, trade wars and the ECB is ignored by the pair.
- The technical picture looks slightly positive.
The EUR/USD is trading around $1.2340, trading a few pips higher on the day and trading in a narrow range. There are no significant euro-zone nor US figures released today but there are quite a few causes for worry.
1) Trade talk: The EU prepared a document detailing a potential retaliation for the tariffs that US President Donald Trump plans to impose on steel and aluminum. A retaliation by the EU could trigger another response from the US and things could easily get out of hand. Reports from the US say that Gary Cohn, Trump's Chief Economic Advisor is trying to allay the President from imposing tariffs. The pair initially reacted positively to the news on the tariffs but the responses now are more mixed.
2) Italian politics: The elections on Sunday resulted in a hung parliament and a stronger hand for the populist eurosceptic parties. Italy's President Sergio Mattarella will now have to decide who will get the first shot at forming a government. The euro fell on the exit polls but then recovered as the focus of traders moved elsewhere. Italy is the eurozone's third-largest country.
3) ECB meeting: The European Central Bank convenes on Thursday and is not expected to announce any policy changes. However, President Mario Draghi is under pressure to make small hawkish tweaks to the statement in preparation for an end to the bond-buying scheme. In addition, the ECB publishes new forecasts for growth and inflation. See the full preview here.
Amid all this uncertainty, the EUR/USD is showing resilience and may even eye the upside.
EUR/USD Technical Picture - Slightly bullish
The pair is trading just above the uptrend support line (purple) that it lost and recaptured. In addition, it trades above the 50 point line on the RSI, another positive sign. However, Momentum is negative at the moment.
The $1.2360 level is critical: it capped the pair in recent days and in late February. A break above this line would open the door to $1.2450, a line that supported the pair when it traded on the higher ground earlier this year. $1.2555 is the 3-year high.
Looking down beyond the uptrend support line, $1.2270 was the low point after the Italian elections. Further down. $1.2205, was the trough on February 22nd. The 7-week low of $1.2154 seen on March 1st is the last line to watch.
-636559282201653677.png)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD extends sideways grind below 1.0900
EUR/USD stays in a consolidation phase below 1.0900 following the previous week's rally. In the absence of high-tier data releases, the US Dollar stays resilient against its rivals as investors scrutinize comments from central bank officials.
Gold retreated from record highs, maintains the upward bias
Gold rose sharply at the beginning of the week on escalating geopolitical tensions and touched a new all-time high of $2,450. With market mood improving modestly, XAU/USD erases a majority of its daily gains but manages to hold above $2,400.
GBP/USD holds steady near 1.2700, in an uneventful US session
GBP/USD fluctuates in a narrow channel near 1.2700 on the first trading day of the week. The cautious market stance helps the US Dollar hold its ground while central bank officials fail to trigger some action ahead of this week's key events.
Ripple stays above $0.50 on Monday as firm backs research on blockchain and quantum computing
XRP price holds steady above the $0.50 key support level and edges higher on Monday, trading at 0.5130 and rising 0.70% in the day at the time of writing.
Week ahead: Nvidia results and UK CPI falling back to target
What a week for investors. The Dow Jones reached a record high and closed last week above 40,000, for the first time ever. This is a major bullish signal even though gains for global stocks were fairly modest on Friday, and European stocks closed lower.