FX.co ★ Technical analysis and trading recommendations on EUR/USD for March 24, 2015

ECB president Draghi delivered speech in Brussels yesterday. This is his first regular hearing at the European Parliament in the year 2015. According to Mario Draghi, the most recent data and survey evidence show that growth is gaining momentum. The basis for the economic recovery in the euro area has clearly strengthened. This is mainly due to the fall in oil prices, the gradual firming of external demand, easy financing conditions driven by our accommodative monetary policy, and the depreciation of the euro. Compared with the projections from December, the outlook for 2015 and 2016 has been visibly revised upwards by 0.5 and 0.4% respectively.

Regarding inflation, the latest ECB assessment foresees average inflation at 0.0% in 2015, rising to 1.5% in 2016 and 1.8% in 2017.

As for the QE, overall the asset purchases will amount to €60 billion per month. The pace of purchases so far puts the overall program on track to reach a total of €60 billion in March. At this point in time, the ECB sees no signs that there will not be enough bonds for them to purchase.

The flash consumer confidence index again surpassed expectations at -4 from -7. The data is still showing the negative territory. Overall, the preliminary figure is good.

Upcoming data

French and German flash manufacturing and services PMI as well as flash manufacturing and flash services PMI reports are due. The eurozone's macroecnoomic calendar offeres a day full of heavy-duty data. Besides, the US CPI, core CPI, flash manufacturing PMI, and new home sales reports are due. We can expect German flash manufacturing and services PMI can come in line with expectations or even higher. The US CPI data has been disappointing for 3 months in a row.

Technical view

The euro extended its pullback story yesterday. US existing home sales data disappointed markets. The euro pullback story is being in process because the euro is getting stronger. The main reason behind the sharp pullback is the US dollar weaknessafter after the FOMC meeting. The pair finally managed to close above 20Dsma at yesterday's session. Today, at the early Asian session the pair is unable to breach yesterday's high, so the euro is trading lower against the greenback. Weekly support is seen at 1.0768 and 1.0700. Bulls will have an upper hand until the pair closes above 1.0700, but limited upside. Intraday support is found at 1.0860. We recommend selling 1.0860 with targets 1.0768, 1.0710, 1.0660, and 1.0615. If the euro data turns out above expectation, we recommend buying above 1.0980 with targets at 1.1040 and 1.1090.

Trade:

Buying above 1.0980.

Selling below 1.0860.

NUTSHELL. Key technical levels of the euro against USD/JPY/CAD/GBP, and AUD

EUR/USD. Weekly mode favors buying with sl 1.0700. Intrday double top is at 1.0971.

EUR/JPY. Weekly mode favors buying with sl 129.20.

EUR/CAD. Weekly mode favors buying with sl 1.3568 with a likely target at 1.3800.

EUR/GBP. Weekly mode favors buying with sl 0.7150 with a likely target at 0.7430 (buying was advised yesterday above 0.7305). Intrday double top is at 0.7330.

EUR/AUD. Fresh selling below 1.3820.

The above analysis taken on the basis of h4 chart. We will re-analyze if the weekly trend changes. The euro has been trading like a mirror image against USD & JPY.