Bearish View
- Sell the EUR/USD pair and set a take-profit at 1.0930.
- Add a stop-loss at 1.1050.
- Timeline: 1-2 days.
Bullish View
- Set a buy-stop at 1.1035 and a take-profit at 1.1100.
- Add a stop-loss at 1.0950.
The EUR/USD pair moved sideways as investors watched the upcoming negotiations on Ukraine in Turkey and the performance of the bond market. It is trading at 1.1100, where it has been in the past few days.
Turkey and Russia Negotiations
The EUR/USD went nowhere as investors focused on the fresh round of talks that is set to take place in Turkey on Tuesday. These talks come at a time when Russia has said that it will shift its focus to Eastern Ukraine.
Also, the Ukrainian president said that he will be open to a deal on neutrality. Still, it is early to determine whether the two sides will reach an agreement.
The EUR/USD also was in a tight range as investors watched the performance of the American bond market. The closely watched yield curve inverted on Monday in a sign that investors expect the American economy to go through a recession.
The performance of the bond market is likely because of the Federal Reserve, which has signalled that it will deliver more rate hikes this year. Indeed, the Fed Chair has hinted that the bank will deliver several 0.50% rate hikes this year.
The next key economic number will be the American consumer confidence data scheduled for Tuesday. This is important data because of the importance of American consumers on the American economy. Consumer spending is the biggest part of the country’s GDP.
Analysts expect that American consumer confidence declined sharply in March as inflation surged. Data published this month revealed that the country’s inflation rose to the highest level in over 4 decades in February. And the situation will get worse as the cost of energy and fertilizer jumps. The US will also publish the latest JOLTs job openings numbers.
EUR/USD Forecast
The EUR/USD pair remained in a tight range. On the four-hour chart, the pair has moved slightly above the 23.6% Fibonacci retracement level. It has also formed a small descending channel that is shown in black.
Further, the pair is trading at the same level as the 25-day and 50-day moving averages while it has formed what looks like a head and shoulders pattern.
Therefore, the EUR/USD will likely remain in this range as investors reflect on geopolitics and the American consumer confidence data.