empty
17.03.2025 05:05 AM
EUR/USD Pair Overview – March 17: No Hint of Correction

This image is no longer relevant

The EUR/USD currency pair did not continue its sluggish downward movement from Wednesday and Thursday on Friday. As a result, we will have to wait once again for a correction. Let's briefly review the current technical situation regarding the European currency.

On both the weekly and monthly timeframes, we clearly have downward trends. The daily timeframe also shows a downward trend, but it is accompanied by a strong upward correction. This upward movement would not have occurred without the influence of Donald Trump's policies. However, the sharp decline of the US dollar has not managed to disrupt its overall upward trends across all higher timeframes. If the pair resumes its decline from current levels, all trends will remain in place, and the euro will likely head toward price parity or even lower.

Currently, the most significant news affecting the market is centered around Donald Trump. Decisions made by the Fed and the ECB in the near future seem less impactful, and the broader macroeconomic environment appears to be of little concern. It's clear that if the US anticipates difficult economic times, those challenges have not yet begun. Meanwhile, the EU economy has been stagnant for the past two and a half years. If the euro is rising, does this imply that the market expects a breakthrough in its economy? But what basis is there for such a breakthrough when Trump's tariffs are likely to slow it down even further? Already, German central bank head Nagel is warning that a recession could ensue if Trump imposes import duties on the European Union.

Thus, both the American and European economies appear on track to slow down. However, the American economy will shrink from a GDP growth of 2-3% per quarter, while the European economy will decline from a meager growth of 0.1-0.2% per quarter. Which economy is more likely to enter a recession?

The same logic applies to the monetary policies of the ECB and the Fed. The ECB is already cutting rates at every meeting and may be compelled to lower them below 2%, which is considered the unofficial "neutral mark." In the first quarter of 2025, we are increasingly hearing that the ECB could have to cut rates much further than previously anticipated. Under certain circumstances, the Fed may also decide to cut rates more than expected with Trump in office.

However, when we look at the current rates set by both the Fed and ECB, and the planned cuts, it suggests that while the situation in America may not be perfect, it is still likely to be better than in the EU. This understanding sheds light on why traders are fleeing from the dollar and why investors are pulling out of American stocks. We would also consider leaving, as Trump is increasingly viewed as a "time bomb." Nevertheless, the dollar is not as weak as it may seem, and the American economy is not facing serious problems—at least not yet.

This image is no longer relevant

The average volatility of the EUR/USD currency pair over the last five trading days, as of March 17, is 79 pips and is considered "moderate." We expect the pair to move between the levels of 1.0800 and 1.0958 on Monday. The long-term regression channel has turned upward, but the global downtrend remains intact, as seen on higher time frames. The CCI indicator dipped into oversold territory, signaling another wave of upward correction, which now barely looks like a correction at all...

Nearest Support Levels:

S1 - 1.0864

S2 - 1.0742

S3 - 1.0620

Nearest Resistance Levels:

R1 - 1.0986

Trading Recommendations:

The EUR/USD pair has exited the sideways channel and continues to show overall growth. In recent months, we have consistently stated that we expect the euro to decline in the medium term, and currently, nothing has changed in that regard. The dollar does not have any significant factors supporting a medium-term decline, aside from Donald Trump's influence. Short positions are still more attractive, with targets set at 1.0315 and 1.0254. However, it is quite challenging to predict when the current growth will come to an end. If you trade based purely on technical analysis, long positions can be considered as long as the price remains above the moving average, with targets at 1.0958 and 1.0986.

Explanation of Illustrations:

Linear Regression Channels help determine the current trend. If both channels are aligned, it indicates a strong trend.

Moving Average Line (settings: 20,0, smoothed) defines the short-term trend and guides the trading direction.

Murray Levels act as target levels for movements and corrections.

Volatility Levels (red lines) represent the likely price range for the pair over the next 24 hours based on current volatility readings.

CCI Indicator: If it enters the oversold region (below -250) or overbought region (above +250), it signals an impending trend reversal in the opposite direction.

Paolo Greco,
Analytical expert of InstaForex
© 2007-2025
Summary
Urgency
Analytic
Stanislav Polyanskiy
Start trade
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

USD/CAD. Analysis and Forecast

On Wednesday, the USD/CAD pair enters a phase of bullish consolidation, fluctuating just below the five-week high reached the day before. Traders are holding off on aggressive positions ahead

Irina Yanina 12:49 2025-07-30 UTC+2

USD/JPY. Analysis and Forecast

During the Asian session today, the Japanese yen strengthened against the weakening U.S. dollar. However, the yen's upward potential is likely to remain limited, as traders may hold

Irina Yanina 12:23 2025-07-30 UTC+2

Trump's Trade Deals Lack Sufficient Detail

It's clear that the Federal Reserve's hesitation to cut interest rates due to inflation risks at home is partly justified by the lack of substantive details in the trade agreements

Jakub Novak 11:35 2025-07-30 UTC+2

Why Are Markets Riding a Wave of Optimism? (There is a likelihood of rising oil prices and declining gold prices)

Recent events—including victorious declarations from Washington about agreements on customs tariffs with Japan and the EU—continue to support demand for risk assets. At least for now, investors are not concerned

Pati Gani 10:16 2025-07-30 UTC+2

The Fed Unlikely to Send Clear Signals

While the euro and British pound show modest gains against the U.S. dollar, investors hoping for Jerome Powell to hint that the Federal Reserve is moving closer to a rate

Jakub Novak 09:54 2025-07-30 UTC+2

The Market Welcomes the Truce

The final word in the U.S.–China trade negotiations is expected from Donald Trump. Until that happens, the S&P 500 has decided to take a step back—especially with key U.S. data

Marek Petkovich 09:05 2025-07-30 UTC+2

What to Pay Attention to on July 30? A Breakdown of Fundamental Events for Beginners

A considerable number of macroeconomic reports are scheduled for Wednesday. Germany, the Eurozone, and the United States will all release Q2 GDP reports. It is worth noting that while

Paolo Greco 07:07 2025-07-30 UTC+2

GBP/USD Overview – July 30: The Pound Keeps Falling "in Sympathy"

The GBP/USD currency pair continued its decline on Monday and extended the move into Tuesday. It's worth noting that the British pound began falling earlier than the euro, already last

Paolo Greco 03:48 2025-07-30 UTC+2

EUR/USD Overview – July 30: Beating the Fallen

The EUR/USD currency pair continued its downward movement on Tuesday, driven by the same factors as on Monday—as we warned in advance. On Monday, it was revealed that the European

Paolo Greco 03:48 2025-07-30 UTC+2

The Fed Will Remain in Wait-and-See Mode Until September

There will likely be some dovish hints, but they will probably not differ from previous statements and rhetoric by Federal Reserve officials. This is the general expectation one day before

Chin Zhao 01:14 2025-07-30 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.