For the FOREX currency market, the last week turned out to be low-key and low active - the currency instruments hesitantly traded within narrow ranges, as trading activity was below the average. In general the situation remained practically unchanged over the last five trading days. As always USD dollar is at the center of the market's attention, and traders look at the dollar when making trade decisions. Last week, USD dollar traded in different directions relative to major currencies. The dollar showed a decline against the British pound and the Japanese yen, but rose against the commodity currencies, and most importantly was able to show a positive close against the euro.
Gaining USD currency in a broad range of markets was happening amid positive macroeconomic data from US, which strengthened investors' expectations that, following a two-day meeting, March 20-21, the Fed will raise the interest rate, and the US economy is still in the expansion phase. At the same time, the weakness of the European currency intensified immediately after the release of data on European inflation, as February inflation fell in February. Moreover, with such indicators it is not necessary to say that the ECB will no weaken its support measures.
The coming week will be rich in news and important events. This week there will be a FOMC meeting, from which the majority of market participants are waiting for rate-hike for the first time this year. The big US statistical block, European and English economies data, and finally EU summits, as well as the G20. All this tell us that the new week will be more volatile than the previous one, and possibly the currency markets will come out of the sideway ranges and will be able to decide on the future direction.
On EUR/USD chart, the previous week close was negative. EUR/USD pair made attempts to gain to the area of $ 1.2412, but failed to gain a foothold above the nearest support of $ 1.2300 and declined below $ 1.2250. Interestingly, already on Monday at European trading session, EUR / USD is making attempts to strengthen and grow into the area of former support, and now the resistance is $ 1.2300. If today or the next session EUR / USD pair will be able to gain a foothold above this round mark, the chances for further positive dynamics will increase significantly. At the same time, the history of recent weeks tells us that the pair is in a protracted sideway consolidation, in which the 1.23 level is a kind of equilibrium, balance level – this zone attracts EUR/USD like a magnet. Such a long-term consolidation involves a very strong and powerful outbreak, that's just in what direction. Most likely this week we will know the answer to this question, since after the decision on the rate the markets will be able to determine with further movement.