EUR/USD: IMMEDIATE PROSPECTS

EUR/USD: IMMEDIATE PROSPECTS

2 March 2022, 11:49
Yuri Papshev
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As Philip Lane, chief economist of the European Central Bank, said last Friday, the military conflict in Ukraine could reduce Eurozone GDP by 0.3%-0.4%. In the worst-case scenario, GDP will shrink by almost 1%. Also, in his opinion, a significant increase in the inflation forecast for 2022 is possible.

EUR/USD may receive support if the Fed, against the background of current events, will raise the rate more slowly than is currently expected in the market. At the same time, the first increase in the ECB interest rate is now not expected earlier than 2023, whereas December of this year was previously scheduled. And much of the dynamics of the euro will also be conditioned by information about the crisis in Ukraine.

Thus, a further decline in EUR/USD is most likely, and in case of a breakthrough of the local support level of 1.1000, the lower line of the descending channel on the weekly EUR/USD chart and the 1.0900 mark becomes the target.

Support levels: 1.1050, 1.1000, 1.0900, 1.0700

Resistance levels: 1.1135, 1.1235, 1.1305, 1.1400, 1.1470, 1.1525, 1.1575

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