EURUSD Daily Forecast The euro rose on Monday after better-than-expected inflation data boosted sentiment towards the currency. Such high inflation data suggest that price pressures remain worrisome and could reduce the ECB’s flexibility in its future policy decisions. Confidence was boosted by reports that European leaders have agreed to a peace deal to end the war in Ukraine. The success of the talks and renewed support for the Ukrainian president have boosted market sentiment towards the euro, making it more attractive to investors. Market attention now turns to the European Central Bank’s two-day monetary policy meeting, which is due to end on Thursday. Traders are expecting a sixth consecutive rate cut of 0.25 percentage points, which could take the interest rate to 2.5%. According to the latest ECB forecast, further easing is expected in April. However, upward pressure on inflation could further complicate these prospects. Recent threats by the United States to impose tariffs on the EU have added to uncertainty and potential risks to the eurozone economy. If the ECB adopts a more cautious stance or suddenly decides to keep interest rates unchanged, market volatility could increase. Investors are closely watching the aggressive rhetoric of politicians. This change could reduce expectations of a monetary policy easing in the near future. Technically, the EURUSD pair is showing strong signals. Once the key level is crossed, the price rises. The daily chart shows a strong green candle breaking the previous resistance line, indicating increased buying pressure. The pair is currently testing a key resistance level at 1.0622 and a solid move above 1.0530 is needed for a move higher. The next key target is 1.0572, a break above which could open the way for a move higher to 1.0665-1.0700. Above this level, the 200-day moving average at 1.0725 acts as a key resistance level and could limit upside opportunities if the broader fundamentals fail to support further gains. Technical indicators provide a deeper insight into the current market sentiment. Bollinger Bands indicate increasing volatility; As prices rise, the upper band is widening. This indicates that the uptrend may continue, but investors should be cautious as extreme price action may occur. The Relative Strength Index (RSI) is now approaching overbought territory at 64.81, but it still shows some upside potential. On the other hand, the Stochastic Oscillator at 90.17 indicates that the pair is approaching oversold levels, raising the possibility of a short-term breakout before a sustained rally. In the short term, the EUR/USD bull market is likely to continue, but investors should watch for signs of exhaustion, especially if prices struggle to break out of key resistance levels. If the breakout is not sustained, a decline to the 1.0480 support level is possible, and the 1.0400 level is possible if selling pressure increases. Volatility is expected to increase as the ECB meeting approaches, and any deviation from market expectations could lead to higher prices. Traders should pay attention to fundamentals and assess technical conditions to determine the next move.
