EUR/USD Technical Analysis – March 12, 2024

In today’s trading session, the EUR/USD pair presents an interesting setup following yesterday’s price action, where it tested the low from last Friday’s NFP release around 1.0915 before rebounding. This movement provides key insights into potential support levels and market sentiment as we navigate through today’s market dynamics.

Current Technical Setup:

The Pivot Point for today is established at 1.09293, serving as a baseline for our trading strategy. On the upside, we have identified Resistance levels at 1.09441 (R1), 1.09630 (R2), and 1.09778 (R3). These levels will be critical in gauging the bullish momentum and potential ceiling for today’s price movement.

Conversely, on the downside, Support levels are set at 1.09104 (S1), 1.08956 (S2), and 1.08767 (S3). These will be essential in understanding the bearish pressure and areas where the price might find a floor during today’s session.

Interestingly, both the 89EMA and 200EMA are converging around the 1.093 mark, indicating a potential zone of equilibrium and making this area particularly significant for today’s trading. At the time of writing, the price of EUR/USD stands at 1.09366, slightly above this convergence zone, suggesting a tentative bullish bias in the market.

The Dollar Index (DXY) is currently at 102.80, providing additional context for the EUR/USD pair’s movements. A stronger DXY typically indicates a weaker EUR/USD and vice versa, so this will be an important factor to watch throughout the trading day.

Market Influences and Strategy:

Today’s market will be heavily influenced by the release of CPI and inflation data from the USA, expected to be significant market movers for the EUR/USD pair. Traders should closely monitor these releases as they could induce volatility and directional movement in the pair.

Given the current technical setup and the anticipated economic releases, traders might consider the following strategies:

  1. Bullish Scenario: Should the price maintain its position above the 89EMA and 200EMA and breach the R1 level at 1.09441, we could see an upward momentum pushing towards R2 and potentially R3. Traders might look for buy opportunities on dips, targeting the resistance levels while maintaining a strict stop loss below the Pivot Point or S1.
  2. Bearish Scenario: If the price falls below the 89EMA and 200EMA and breaks through the S1 level at 1.09104, this could signal a bearish trend with potential targets at S2 and S3. In this case, traders might consider selling on rallies, setting a stop loss above the Pivot Point or R1.

Conclusion:

As we navigate through today’s session, the interplay between technical levels and the impact of US economic data will be crucial. Traders should remain vigilant, adapt to the evolving market conditions, and employ sound risk management practices. The ability to respond promptly to the price action post-economic releases while respecting technical levels will be key to capitalizing on trading opportunities in the EUR/USD pair today.

Trading our dreams into reality,

Mihai Paul Olteanu