The Euro has rallied at the start of the trading session on Monday but has since given back gains showing signs of fatigue. Now it looks like he is sticking with the idea of getting back to the 1.10 level and obviously you have to keep in mind that there are a lot of factors working against the euro rallying. Take into account that on the one hand there is the war in Ukraine and on the other hand the fact that the Federal Reserve is meeting this week and should raise interest rates.
EUR/USD Euro Technical Analysis Video 03/15/22
The interest rate issue should continue to favor the US dollar although we will have to wait until the end of the Federal Reserve meeting to see what tone is used regarding stimulus. At the moment, traders still have many questions about whether the Fed will remain as favorable to withdrawing stimulus as it has been lately or if, on the contrary, it will show some change in the opposite direction, just at a time when supply chains will once again worry about the closure of the ports of Shenzhen.
In this scenario, there are many traders betting that the Federal Reserve will not be able to withdraw the stimulus too aggressively, although at the same time we must not lose sight of the fact that inflation is very high and will be putting pressure on them.
For all this, I anticipate that we will see a lot of noise in this pair, although I suspect that with a certain bearish bias due to the fact that the US dollar is a refuge currency that is attractive in this type of complicated scenario. Basic until we break above the level at 1.11 I will not take a possible recovery seriously.
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This article was originally published on FX Empire