29.03.2023 12:38 PM
Forecast for EUR/USD on March 29. The dollar is likely to remain under pressure in the near future
On Tuesday, the EUR/USD pair maintained its upward trend toward the corrective level of 200.0% (1.0861). The US dollar will benefit from the pair's rebound from this level and the start of a new decline in the direction of the 1.0750 level. The likelihood of further development toward the following level of 1.1000 will rise if the price closes above 1.0861. I continue to think that the US dollar should benefit from closing under an upward trend corridor.

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On Tuesday, no additional information was provided. Only secondary information (such as speeches from ECB or Fed officials or representatives of various big banks) is currently making its way to the market. As a result, Commerzbank economists predicted that the US dollar may shortly continue to face market pressure because of the Fed officials' dovish comments made last week. They pointed out that the financial markets are still in a state of tension, so the FOMC is likely to delay raising rates or stop this cycle altogether. In addition, a report on European inflation for March will be made public on Friday. This report may reveal yet another acceleration of the baseline indicator, which serves as the foundation for ECB monetary policy decisions. The European regulator must keep tightening its regulations in the event of another rise in the consumer price index.

As a result, traders may soon favor the euro over the US currency. Since the level of 1.0861 has not yet been surpassed, I think bear traders can take the lead away from the bulls. The pair has already declined. Additionally, the European Union inflation data may not be as depressing as it first appears. The primary sign, for instance, might drop by 1.2% all at once. Anyway, traders have been actively purchasing the euro currency in recent weeks, so it is doubtful that this currency will continue to increase in value.

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The 4-hour chart shows that the pair has stabilized above the side corridor, allowing us to predict further growth. However, consolidation was not possible above the corrective level of 50% (1.0941). As a result, the decline in quotes can always be resumed in the direction of the corrective level of 38.2% (1.0610). Current indicators do not show developing divergences.

Report on Commitments of Traders (COT):

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Speculators closed 6,488 long contracts and 11,374 short contracts during the most recent reporting week. Major traders' overall attitude is still "bullish" and getting better. Speculators now have 215 thousand long contracts, while just 71 thousand short contracts are concentrated in their hands. Although the value of the euro has been rising for several months in a row, professional traders have not raised the number of long contracts in recent weeks. After a protracted "black period," the situation is still in favor of the euro, and its prospects are strong. Until the ECB gradually raises the interest rate by increments of 0.50%, at least. I would like to point out that the market could become "bearish" in the near future since the ECB won't be able to keep raising interest rates by half a percent.

News calendars for the United States and the European Union:

The United States and the European Union both have zero economic activities scheduled for March 29. Today's traders' mood will be unaffected by the information background.

Forecast for EUR/USD and trading advice:

On the hourly chart, the pair's sales can be initiated when they rebound from the 1.0861 level with a target of 1.0750. On the hourly chart, buying the pair with a target of 1.1000 will be possible if it closes above the level of 1.0861.

Samir Klishi,
Analytical expert of InstaForex
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