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07.03.202307:39 Forex Analysis & Reviews: Breaking forecast for EUR/USD on March 7, 2023

This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here.

A decline in the eurozone retail sales slackened to -2.3% from -2.8%. It is good news but analysts had expected a decrease of just 1.2%. Nevertheless, the euro showed a confident rise. The situation is similar to the one we saw on Friday when the pound sterling grew without reasons. It seems that the market sentiment is shaped only by technical factors. The euro jumped to the high recorded at the beginning of March. As a result, we see a channel with the limits at 1.06 and 1.07. In other words, the market is stagnant. There is no wonder since this month, the main central banks may alter their plans. Under the current conditions, traders prefer to remain cautious. What is more, the macroeconomic data is almost in line with forecasts. At least trends meet expectations.

Exchange Rates 07.03.2023 analysis

Eurozone Retail Sales

The euro opened a new trading week with a 0.4% rise against the US dollar. This led to the continuation of the upward cycle from the support level of 1.0500.

On the four-hour chart, the RSI technical indicator is hovering in the upper area of 50/70, which points to the growth in the volume of long positions. On the daily chart, the RSI exceeded the mid line 50 for the first time since February. This may point to the recovery process in the euro.

On the four-hour chart, the Alligator's MAs finished the intersection period by a rise, which corresponds to the movement from the support level of 1.0500. On the daily chart, MAs are still headed downwards but there is an initial signal of the change in their direction.

Exchange Rates 07.03.2023 analysis

Outlook

If the existing cycle remains intact, traders may receive a technical signal of the euro's recovery after a slump in February. In the event of this, the euro will gain in value gradually. To boost the number of long positions, the price should consolidate above 1.0800.

The downward scenario will become possible if the price slides below 1.0600. In this case, the likelihood to reach a new local low will become significantly higher.

The complex indicator analysis unveiled that in the short-term and intraday periods, indicators are providing an upward signal amid a rise in the number of long positions.

Dean Leo
Analytical expert of InstaForex
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