19.03.202604:39 Forex Analysis & Reviews: EUR/USD Overview. March 19. Europe Is No Help to Trump

The EUR/USD currency pair traded very calmly throughout Wednesday. The market was clearly waiting for the results of the Fed meeting, and the geopolitical conflict finally began to recede into the background. Interestingly, it was Donald Trump who triggered the decrease in tension in the Middle East. The American president clearly hoped for support from European countries in the war with Iran and has been desperately trying to persuade European leaders to provide the US with military bases and to send warships to the Strait of Hormuz to lift the blockade. However, Trump's idea was not supported in Europe. Trump, understandably upset, once again began threatening to withdraw the US from NATO.

The most interesting thing is that even in the US, not all officials and politicians understand why a war with Iran was necessary. Of course, Trump's followers and supporters back this decision, but the need was his own. For example, to distract public attention from the Epstein files. However, all other politicians and experts unanimously claim that there was no threat from Iran.

As Trump himself said, Iranian missiles are not capable of reaching the US, so even theoretically, Iran could not strike American territory. Moreover, in the past year, many hidden enemies have appeared on the geopolitical map of the world, thanks to the policies of the new-old president. One wonders, does Trump plan to wage war against all of them, as each of these countries could theoretically strike at the US? If not with nuclear missiles, then with ballistic ones.

As a result, Trump is left to confront Iran in proud isolation. Of course, the Persian Gulf countries continue to side with America, but they have no other choice. Europe, on the other hand, does. As French President Emmanuel Macron stated, "This is not our war." Indeed, why should European countries support Trump's aggression? To provoke a retaliatory attack from Iran on their territory? As already mentioned, Iranian missiles cannot reach the US, but they can certainly reach European countries.

Therefore, the European Union has taken the most logical position. If Trump wants to fight, let him fight. This will certainly cause harm to the entire world, but supporting Trump could lead to even greater losses. Right now, Europe essentially needs to solve only the energy issue. If Europe becomes embroiled in the war, missiles will be aimed at its oil refineries and LNG facilities. The situation would become even worse, and this would not result in more oil for Europe. Meanwhile, Iran wants to completely abandon transactions in American currency...

In our view, the US dollar still has no grounds for growth. Even the geopolitical factor is a temporary support, not a permanent one. This is emotional support, not fundamental. Right now, Trump does not even know how to end the conflict in the Middle East, but for now, he has moved American ships further away from the Persian Gulf...

The average volatility of the EUR/USD currency pair over the last 5 trading days as of March 19 is 84 pips and is characterized as "average." We expect the pair to move between the levels of 1.1414 and 1.1582 on Thursday. The upper linear regression channel has leveled off, indicating a potential trend reversal. The CCI indicator has once again entered the oversold area and formed a "bullish" divergence, but even technical signals are playing no role at the moment.

Nearest Support Levels:

S1 – 1.1475

S2 – 1.1353

S3 – 1.1230

Nearest Resistance Levels:

R1 – 1.1597

R2 – 1.1719

R3 – 1.1841

Trading Recommendations:

The EUR/USD pair continues to fall, which no longer resembles a correction. The global fundamental background remains extremely negative for the dollar. However, for several consecutive weeks, the market has focused solely on geopolitics, making all other factors irrelevant. If the price is below the moving average, short positions can be considered with targets at 1.1414 and 1.1353. Above the moving average line, long positions remain relevant with targets at 1.1963 and 1.2085, but for this scenario, the geopolitical background needs to improve.

Explanations for Illustrations:

• Linear regression channels help determine the current trend. If both are directed in the same way, then the trend is strong at the moment;
• The moving average line (settings 20,0, smoothed) determines the short-term trend and the direction of trading;
• Murray levels – target levels for movements and corrections;
• Volatility levels (red lines) – the probable price channel in which the pair will move in the upcoming days based on current volatility readings;
• The CCI indicator – its entry into the oversold area (below -250) or the overbought area (above +250) indicates that a trend reversal is approaching in the opposite direction.