17.03.202112:54 Forex Analysis & Reviews: Analysis and forecast for EUR/USD on March 17, 2021

This evening at 19:00 London time, the US Federal Reserve will announce its decision on the interest rate, publish updated economic forecasts, and the press conference of Fed Chairman Jerome Powell will begin half an hour after that. Perhaps, this is the main event of this week for the Forex currency market. However, the President of the European Central Bank (ECB), Christine Lagarde, will speak twice tomorrow. Perhaps something new will be heard in her speeches, however, today's events related to the Fed seem to be the most important and significant for the world's financial markets. It is no secret that for a long time, there has been talk about what will happen if some serious countries, such as Russia, China and some others, abandon the use of the US dollar and conduct bilateral trade settlements in their national currencies. Nothing will happen, because the dollar can not be so easily and simply abandoned at one time.

Even with all the desire, this is not so easy to do, since the main world reserve currency is linked to the prices of gold, oil, and other important commodities, as well as the value of stock indexes and company shares. If you go back to today's economic calendar to close this topic and go to the technical part of the article, it is worth noting the consumer price index of the eurozone, which will be published at 11:00 (London time). I do not think that in the context of the failed vaccination campaign against the COVID-19 pandemic, and in general, the coronavirus epidemic that is not subsiding in Europe, we will see good data on consumer prices in the eurozone. Anyway, in my opinion, these releases in their importance and significance do not go to any comparison with the evening news from the Fed. The vast majority of market participants are concerned about how the world's leading economy is coping with the COVID-19 pandemic and what its future prospects are. As for the US dollar, I once again express the opinion that it has been and will remain the main and most interesting currency. Let's see with what technical features the main currency pair EUR/USD approaches this evening's decision of the Fed and the speech of the head of this department Jerome Powell.

Daily

In yesterday's trading, the euro/dollar pair continued to move in a southerly direction, ending trading on March 16 with the formation of a bearish candle with the closing price at 1.1901. It can be assumed that the quote has already been fixed under the psychological mark of 1.2000, but, as noted earlier, the level of 1.1900 is also very important for the market, and it is not so easy to overcome. However, given today's major events related to the Fed, it is difficult to find a better catalyst for passing this or that level. I believe that it is today that the direction of the EUR/USD pair will finally become clear. A confident close of today's trading at 1.1900 and below yesterday's lows of 1.1882 will open the way to the area of 1.1830, where a strong support level and the orange 200 exponential moving average are located. The next target of sellers will be a very important mark of 1.1800, which has repeatedly turned the price.

Now for the trading recommendations. On such days, it is always difficult to make any forecasts and offer specific and unambiguous trading ideas, since events related to the Fed can make significant changes in the course of trading. And yet, at this stage of time, I adhere to the version of the downward scenario and consider the main trading idea for the pair to be sales, which technically look best after the rate rises to the area of 1.1900-1.1920. By the way, yesterday's recommendations to sell the pair after rising to the area of 1.1950-1.2000 were confirmed. Given the downward direction of the instrument, the prices for opening short positions today are given lower. Which is quite technically justified. For purchases, I recommend using the price zone of 1.1830-1.1800. I believe that this is one of the last strongholds of the euro bulls, and they will try to keep the pair above 1.1800 at all costs.