FX.co ★ Analysis of EUR/USD for March 07, 2014

The European Central Bank kept its interest rate on hold. After the decision to keep rates at a record low of 0.25%, Draghi said the bank raised its projection for economic growth to 1.2% in this year from 1.1% and left next year's unchanged at 1.5%. It introduced a forecast for 2016 at 1.8%. The euro moved above $1.38. Expectations that the central bank will not cut rates tend to boost the euro. This year's CPI forecast was trimmed lower to 1% from 1.1% and left next year's forecast unchanged at 1.3%.

Technical view-

EUR/USD moved to higher levels at $1.3873. After the pair made a double top on the H4 chart dated February 28, 2014, it gone through a correction up to 1.3708 consolidated for 3 days. In yesterday's trading session the pair gave a nice breakout and moved above the resistance zone of 1.3824. In our previous report (Feb 04,2014) we gave a buy call above 1.3773 for 1.39. It’s almost finished. In the hourly and H4 charts, oscillators are giving a sell indication, RSI stood in overbought zone.

Trend decider level is 1.3824, until it holds, we will see some up move towards 1.39 and 1.3920. Fresh breakout is only above 1.3964. A day close below 1.3643 is not good for longs.

Intraday

S1 1.3824 R1 1.3873

S2 1.3808 R2 1.39

Positional

S1 1.38 R1 1.3893

S2 1.3708 R2 1.3964

S3 1.3643 R3 1.4171