Forex. EUR/USD: buyers are tired of negative

USD/CAD forex analysis on March 11, 2025In Tuesday's morning session, the USD/CAD currency pair shows neutral dynamics, remaining near the 1.4435 mark. The volatility of currency pairs is low. Investors have taken a wait-and-see attitude, waiting for important economic data and decisions that may set the direction of further movement.On Tuesday at 14:30 (GMT+2), the market will focus on the February US inflation report. The annual consumer price index is projected to decrease further from 3.0% to 2.9%, and monthly from 0.5% to 0.3%. The base index (excluding food and energy resources) may also drop from 3.3% to 3.2% in annual terms and from 0.4% to 0.3% on a monthly basis. These data can strengthen market expectations regarding a possible easing of the Federal Reserve's monetary policy.An additional uncertainty factor remains the risk of escalating trade conflicts. In March, the administration of Donald Trump may announce new tariffs against the EU, as well as impose duties on steel and aluminum imports. Markets see this as a threat to economic growth.The Bank of Canada will hold a monetary policy meeting on Wednesday at 3:45 p.m. (GMT+2). The key rate is expected to decrease by 25 basis points to 2.75%. This will be the seventh decline in a row. However, the regulator's further steps remain questionable due to increased uncertainty related to the US tariff policy.This week, US duties of 25% on a number of Canadian goods came into force. In response, Canadian Prime Minister Justin Trudeau announced mirror measures. At the same time, the United States granted a temporary postponement for some items on the USMCA list, which leaves room for possible negotiations.The head of the Bank of Canada, Tiff Macklem, previously stressed that the regulator will have to consider the balance between the risks of an economic slowdown and rising inflation caused by trade restrictions. According to market estimates, the probability of a March rate cut has exceeded 80%.The latest employment report in Canada disappointed investors: job growth in February was only 1.1 thousand instead of the expected 20.0 thousand, against the previous value of 76.0 thousand. The average hourly wage accelerated from 3.7% to 4.0%, while the unemployment rate remained at 6.6%, contrary to the forecast of 6.7%.USD/CAD technical analysis for todayOn the daily chart, the Bollinger bands continue to expand, indicating high volatility. The MACD indicates a weak buy signal, as its histogram is above the signal line. The stochastic oscillator maintains an upward direction, approaching the overbought zone, which may signal a possible correction in the near future.Trading recommendations• Purchases should be considered after a confident breakdown of the 1.4472 level, with a target of 1.4550. The stop loss can be placed at 1.4435. Implementation period: 1-2 days.• Open sales after the breakdown of the 1.4400 level down, with a target of 1.4300. The stop loss is 1.4450.Thus, the USD/CAD pair remains in a zone of uncertainty, and the upcoming macroeconomic events may set a new direction for it.

AUD/USD showed a moderate decline during Tuesday's Asian session, developing an uncertain "bearish" trend that began to form at the end of last week. Quotes are testing the 0.6260 level for a downward breakdown, while market participants expect new catalysts for further movement. The pair's growth potential is limited due to uncertainty in US trade policy, which reduces interest in risky assets, including the Australian dollar.China, Australia's largest trading partner, has imposed "mirror" duties on some American agricultural products in response to the increase in US tariffs on Chinese imports from 10% to 20%. Andrew Hauser, Deputy Governor of the Reserve Bank of Australia (RBA), noted that global trade uncertainty has reached a 50-year high. This may force companies and households to postpone investments and planning, which will negatively affect economic growth.Data on consumer inflation in the United States will be published tomorrow at 14:30 (GMT+2). The annual rate is expected to decrease from 3.0% to 2.9%, and the monthly rate from 0.5% to 0.3%. The base index, which excludes food and energy resources, may also drop from 3.3% to 3.2% on an annual basis and from 0.4% to 0.3% on a monthly basis. This may strengthen expectations of further easing of the Fed's monetary policy. However, markets fear that an escalation of trade wars could lead to an acceleration of inflation in the future. In particular, the introduction of new tariffs on goods from the EU, as well as on steel and aluminum imports to the United States, is not excluded.The recently released data from Australia did not provide significant support to the Australian dollar. The Westpac consumer confidence index rose from 0.1% to 4.0% in March, while the National Australia Bank's business conditions index increased from 3.0 to 4.0 points in February. However, the business confidence index decreased from 5.0 to -1.0 points, indicating a deterioration in business sentiment.AUD/USD Technical Analysis for todayAccording to the Daily, the Bollinger indicator shows a moderate decline, while the price range is narrowing, reflecting the mixed nature of trading in the short term. The MACD indicator is declining, maintaining a weak sell signal. Stochastic also shows a decrease, being in the middle of the working area.Trading recommendations- Selling deals after the breakdown of the 0.6250 level down with a target of 0.6200. It is recommended to set the stop loss at 0.6274.- Purchases will be relevant in case of a rebound from the 0.6250 level and an upward breakdown of the 0.6274 level. The target will be 0.6330. In this case, the stop loss should be placed at 0.6250.

FOREX Fundamental analysis for EUR/USD on March 11, 2025If earlier the Democratic administration sought a mild slowdown in the US economy amid lower inflation, the new Republican administration is abruptly changing course, which could lead to a recession. Donald Trump's statements about the "transition period" and calls to ignore the stock market have caused panic among investors. This led to the EUR/USD pair approaching the level of 1.085 again after a decline in the European session.The decline in the euro was caused by the refusal of the Green Party in Germany to support Friedrich Merz's initiative to change the fiscal brake. This plan included financing military expenditures and the creation of a special fund for 500 billion euros for infrastructure. Two-thirds of the votes in parliament were required for implementation, but the new composition, which will begin work on March 25, is unlikely to support these ideas, as the left-wing parties and Alternative for Germany oppose the initiative.If Friedrich Merz fails to realize his plans, this may trigger large-scale sales of EUR/USD. The drop may be as rapid as the rumored March rise, when the pair showed its best weekly performance since 2009.The new US administration seems ready to allow a recession and rising inflation in order to "make America great" in the long run. However, consumers do not know how to respond to such changes. The inflation expectations recorded by the Federal Reserve Bank of New York show that a decline in GDP may slow down price growth.The risks of a recession in the United States are growing. Goldman Sachs increased the probability of a recession from 15% to 20%, Yardeni Research — from 20% to 35%, and JP Morgan — from 30% to 40%. Morgan Stanley lowered its forecast for US GDP for 2025 to 1.5%, and for 2026 to 1.2%.The US dollar continues to weaken, which is reflected in the shift in expectations for the resumption of monetary easing by the Fed from July to May. However, the strength of the euro depends on Friedrich Merz's ability to negotiate with the Greens. If he succeeds, EUR/USD may rise to the level of 1.10.The key risks for the euro remain a possible trade war between the United States and the EU, as well as an escalation of the armed conflict in Ukraine. These factors may limit the growth potential of the single currency.Given the current uncertainty in the market, it is possible to consider the installation of pending forex orders at the boundaries of the established range.:- Purchase of EUR/USD from 1.0875 with the aim of further growth.- Sale of EUR/USD from 1.0805** in case of a decrease.

The Eurozone: investor sentiment and macroeconomic expectationsThe Sentix index, reflecting investor sentiment, will be published in the Eurozone today. It is important to understand whether the positive momentum of February has been maintained in March. This indicator can provide additional guidance for assessing the current dynamics of economic growth and investment activity in the region.A number of macroeconomic data is expected to be published in Sweden, including the cost of production index, household consumption, as well as data on industrial orders and turnover. These indicators will help to better assess the vector of development of the Swedish economy. However, special attention will be paid to the GDP indicator for January, although its predictive power relative to actual data remains low.In Norway, the market is following the February inflation. In January, core inflation unexpectedly rose to 2.8% YoY, mainly due to rising import prices. According to forecasts, core inflation could strengthen by 0.25% mom in February (seasonally adjusted data), which would leave annual growth at 2.9%. This is higher than Norges Bank's December forecast (2.7%), which may increase speculation about a possible slowdown in the disinflationary trend or even its reversal.During the week, the focus will be on the meeting of representatives of the United States and Ukraine on Tuesday, as well as possible news from Germany, where a large-scale fiscal package approved by the new government is being discussed.Overview of key eventsIn the United States, the February labor market report showed an expected increase in the number of jobs by 151 thousand (forecast: 160 thousand, previous value: 143 thousand). Despite the dismissal of 30,000 public sector employees and a decrease in migration inflows, this indicator remains stable. Unemployment increased to 4.1% in February from 4.0% in January, but so far it does not signal a recession or overheating of the economy.On the geopolitical front, Donald Trump announced the possibility of imposing new large-scale sanctions and tariffs against Russia in order to increase pressure on Moscow as part of the settlement of the conflict in Ukraine. A meeting between representatives of the United States and Ukraine is scheduled this week in Saudi Arabia, and it is expected that it will be more productive than Vladimir Zelensky's recent visit to Washington, which ended with the suspension of military assistance to Kiev.In the Eurozone, the final GDP data for the fourth quarter turned out to be higher than expected, with growth of 0.2% (previous reading: 0.1%). The GDP growth forecast for 2024 has also been revised from 0.9% to 1.2%, which is a positive signal for the region's economy.In China, the February consumer price index decreased by 0.7% YoY (forecast: -0.5%, previous value: +0.5%), which was the first decrease in 13 months. The main reasons were the early Lunar New Year celebrations and lower food prices. Further attention will be focused on assessing the effectiveness of Beijing's economic stimulus measures.In Denmark, industrial production fell by 11.9% in January (seasonally adjusted data). Even taking into account the traditional volatility of this indicator, this is a significant decrease. The pharmaceutical sector made the main contribution to the decline, but excluding pharmaceuticals, production still decreased by 7.7%.Stock markets: recovery or correction?US stock indexes ended Friday with gains after an unexpectedly strong employment report and moderately dovish comments from Fed Chairman Jerome Powell. However, the weekly decline was significant. The S&P 500 lost 3.3%, while European markets declined 0.6%. The Nasdaq and Russell 2000 indexes reached a correction level relative to post-election highs, while the S&P 500 fell by 6% from its peak values.Over the past three weeks, there have been significant differences in the dynamics of various sectors and regions. In the United States, the banking sector, the automotive industry, and the consumer sector were the most affected, with declines of 5-10%. In Europe, despite the general decline in markets, the sectoral picture is different: the main losses were recorded in real estate (-8%) and consumer durable goods (-8%), while capital goods and raw materials companies showed an increase of 3-4%.Private investors were faster than professional investors in predicting a correction, as the AAII bulls and bears index went into negative territory at the beginning of the year. However, despite the deepening correction in the US stock markets, the index remains at historically low levels, and the Fear & Greed index has reached the "extreme fear" zone.The weekend brought "bearish" comments from Donald Trump, who said the US was expecting a "transition period" due to tariffs. Unlike in his first administration, when the stock market was an important indicator of politics, he now highlights the country's long-term strategic interests, which increases uncertainty for investors.Bond and currency markets: rising yields and a stronger dollarThe February employment report did not have a significant impact on the bond market, but yields rose by the weekend after Powell's statements, who noted that the US economy was "feeling fine" and the Fed was in no hurry to revise the rate. However, part of this movement was offset on Monday by a deterioration in global risk appetite and a decline in stock indexes.The US dollar has recovered some of the losses it suffered during the tumultuous past week. The EUR/USD exchange rate, which fell below 1.04 on Monday, reached 1.0889 on Friday, but then adjusted to 1.0835.In the Scandinavian currency market, SEK remains the strongest among the major currencies: EUR/SEK broke through the 11.00 mark and is trading around 10.90. At the same time, EUR/NOK continues to grow gradually, approaching 11.80.Thus, global markets continue to balance between the prospects of monetary policy, inflationary trends and geopolitical risks, which creates increased volatility of currency pairs and uncertainty in the short term.

FOREX Fundamental analysis for EUR/USD on March 10, 2025While Europe is gripped by euphoria due to Germany's transition to large-scale fiscal stimulus, in the United States, political uncertainty is increasing the risks of recession. This has changed the forex hedging system, and speculators have been selling the US dollar for the seventh week in a row, and the EUR/USD pair has shown the best weekly dynamics since 2009. The gap between expectations and reality on both sides of the Atlantic has caused a sharp rise in the main currency pair.Fed Chairman Jerome Powell said that the central bank can afford to wait with a rate cut, as the current situation does not require immediate action. However, the futures market raised expectations for the scale of monetary easing. Now, by the end of 2025, three rate cuts are expected, although one or two were predicted at the beginning of the year. This is due to a series of disappointing data on the US economy, which increases the risks of recession.US President Donald Trump does not rule out the possibility of an economic downturn, noting that the current policy of the White House may cause short-term turbulence, but in the long run it will lead to the prosperity of the country. Treasury Secretary Scott Bessant believes that the United States needs a period of "detoxification" to reduce dependence on government spending.In Germany, the situation is the opposite. After years of fiscal consolidation, the country's economy found itself in recession in 2023-2024. However, the ambitious plans of the new Chancellor Friedrich Merz have caused optimism in the markets. Expectations of large-scale fiscal stimulus led to capital inflows to Europe, which supported the growth of stock indexes and accelerated the EUR/USD rally to the fastest pace since 2009.The further dynamics of the EUR/USD pair will depend on whether the pessimistic scenarios for the United States and the optimistic ones for Germany are realized. Jerome Powell stressed that the Fed needs to see progress in reducing inflation and weakening the labor market. At the same time, employment growth of 151 thousand in February was called "solid", which became the basis for profit-taking in EUR/USD.It remains unclear whether Friedrich Merz will be able to get the support of two-thirds of parliament to change the fiscal brake. A possible trade war between the US and the EU, which could negatively affect the eurozone economy, will also be an important factor. These concerns restrain the further growth of the EUR/USD pair.New data on the US consumer price index (CPI) for February may shake up the market again. Continued disinflation will accelerate the sale of the dollar, and rising prices will trigger sales of EUR/USD. In the near future, the euro may enter a consolidation phase. While the pair is trading below the 1.0850 pivot, short positions are a priority.

Investors are focused on the final data on the national accounts of the eurozone for the fourth quarter, especially the indicators of hours worked and private consumption. These indicators will help to assess the dynamics of the region's economy before the next ECB decisions.US markets are waiting for the February labor market report to be published. According to forecasts, the growth in the number of jobs outside agriculture (NFP) will slow down to 120 thousand, compared with 143 thousand in January. The decline is influenced by seasonal factors, cuts at the federal level and a slowdown in immigration, limiting the supply of labor.Denmark will release industrial production data for January. After growing by 4% in December and an annual increase of 8.6% in 2024, the country's industrial sector is showing resilience in contrast to other European countries.Statistics on manufacturing production are expected in Norway. After a sharp drop in the summer of 2023, there was an upward jump in December, but weak leading indicators (PMI and confidence index) raise questions about the long-term sustainability of this growth.In Sweden, markets continue to analyze the impact of an unexpected increase in inflation exceeding the forecasts of the Riksbank. A report on the level of government borrowing for February, which has already exceeded forecasts by 18 billion SEK, will also be released today.China is to publish the consumer price Index (CPI) for February. The indicator is projected to decrease to -0.4% in annual terms, compared with 0.5% in January. The main reason is the effect of the Chinese New Year, which temporarily raised prices in January. Industrial prices (PPI) will remain in the deflation zone, falling by 2.1% against -2.3% a month earlier.Economic and market newsThe ECB's decision and its impactThe European Central Bank cut the interest rate by 25 bps to 2.50%, which was expected by the markets. Investors are now assessing the prospects for further easing. Despite the ECB's statements about reducing policy rigidity, uncertainty remains due to geopolitical risks and fiscal policy. We expect a further rate cut to 1.5% by September, which is below market forecasts.USA: labor market and macroeconomic dynamicsThe number of initial applications for unemployment benefits in the United States decreased by 21,000 to 221,000, which turned out to be better than expected. However, repeat applications increased by 42,000 to 1,897 million, confirming the continued rigidity of the labor market.China: weaker imports and trade tensionsChina's imports fell by 8.4% in February, significantly worse than expectations for a 1% increase. Exports increased by only 2.3% instead of the expected 5.0%. This indicates a deterioration in trade relations with the United States and a decrease in business activity during the holidays.Scandinavia: inflation in Sweden and declining bankruptcies in DenmarkIn Sweden, unexpectedly high inflation led to a strengthening of the SEK, which increased expectations for the end of the rate cut cycle. Meanwhile, in Denmark, the number of bankruptcies decreased by 8.8% compared to January, returning to pre-pandemic levels. The National Bank of Denmark also lowered its key rate by 25 bps to 2.10%.Geopolitics: US trade policy and Conflict risks in EuropeUS President Donald Trump has temporarily postponed the imposition of tariffs on goods from Canada and Mexico under the USMCA until April 2, but 25% duties on steel and aluminum will take effect on March 12. Geopolitical risks are increasing in Europe: Russia has warned French President Emmanuel Macron about threats related to his statements about nuclear weapons, and also rejected NATO proposals for a peacekeeping mission in Ukraine.Stock markets: US declines, Europe outperformsGlobal stock markets closed in different directions: the United States showed a decline, while Europe continued to grow. Investors are gradually shifting their trust in politics from the United States to Europe.US indexes ended the day in the red• Dow Jones -0.99%• S&P 500 -1.8%• Nasdaq -2.6%• Russell 2000 -1.6%Cyclical stocks are growing the most in Europe, especially industrial companies that expect infrastructure investments to grow. Banks are significantly outperforming the REIT sector, which is suffering from rising bond yields.In Asia, Chinese stocks are showing growth, while the Japanese market is under pressure due to the strengthening of the yen.Bonds and currenciesThe yield on German 10-year bonds (Bund) initially exceeded 2.9%, but then dropped to 2.83% amid the "last rush" of buyers. After the ECB meeting, the markets overestimated the possible level of the final rate, raising it by 20 bps.In the foreign exchange market, EUR/USD stabilized near 1.08 after rising due to the expansion of fiscal stimulus in the eurozone. The pound remains under pressure due to high volatility. USD/JPY dropped below 148, while EUR/CHF corrected some of the recent gains.ConclusionCurrency pairs remain highly volatile on FOREX, and investors are closely monitoring macroeconomic data and the geopolitical situation. The eurozone continues to attract attention due to fiscal stimulus, while the United States is facing labor market problems and policy uncertainty. China remains under pressure from low inflation and weakening trade.

FOREX Fundamental analysis for EUR/USD on March 7, 2025The tariff policy of the White House administration continues to cause panic in the financial markets. Stock indexes are declining despite the partial exemption of Mexico and Canada from tariffs. The EUR/USD pair, which had previously shown growth, is beginning to feel resistance, as a significant part of the negative factors have already been taken into account in the US dollar exchange rate. Against this background, the publication of US employment data for February may cause serious fluctuations in the Forex market.Donald Trump has decided to temporarily exempt goods from Mexico and Canada that comply with the terms of the USMCA agreement from previously announced tariffs until April. This decision will affect about 50% of Mexican and 38% of Canadian imports. In response, Canada postponed the imposition of tariffs on $87 billion and offered to renegotiate the terms of the Free Trade Agreement.The USMCA agreement, which came into force at the end of Trump's first term, has been the subject of controversy. The US president has repeatedly stated that trading partners and allies "live at the expense of the United States," which creates tension not only with Mexico and Canada, but also with other countries, including Ukraine.Investors are confused by Trump's unpredictable policies. This led to an outflow of capital from the United States to Europe, which supported the euro and allowed it to show the best weekly dynamics since the pandemic. However, the euro rally was suspended after the ECB meeting and in anticipation of data on the US labor market.At the ECB's March meeting, the deposit rate was lowered by 25 basis points to 2.5%, the sixth decrease in the last seven meetings. Inflation forecasts for 2025 were raised to 2.3%, and GDP forecasts were lowered to 0.9%. ECB President Christine Lagarde announced the transition to a more cautious approach, leaving the opportunity for a pause in further policy easing. This caused a mixed market reaction: the euro initially rose, but then began to decline.The US employment report for February will be a key event for the market. Optimists believe that most of the layoffs in the public sector have not yet been accounted for, so the data may be better than expected. However, in the medium term, the labor market is likely to continue to cool.Trading recommendations- If the employment data turns out to be close to forecasts, profit-taking on long positions is possible, which will lead to sales at the breakdown of the 1.0765 support.- In case of strong employment data, sharp fluctuations are possible, which will create opportunities for purchases on drawdowns.

During the Asian session, the Australian dollar continues to develop the bullish momentum formed at the beginning of the week. AUD/USD quotes are testing the 0.6345 level for an upward breakout, updating local highs since February 24.Data on the number of applications for unemployment benefits in the United States will be published today at 15:30 (GMT+2). It is expected that the number of initial requests will decrease from 242.0 thousand to 235.0 thousand for the week of February 28, and repeat requests (for the week of February 21) may grow from 1,862 million to 1,880 million.The February labor market report will be released tomorrow at 15:30 (GMT+2), which may influence further Fed decisions. It is predicted that the number of new jobs outside the agricultural sector will grow from 143.0 thousand to 160.0 thousand, and the average hourly wage will slow down from 0.5% to 0.3% in monthly terms. The annual wage rate will remain at 4.1%, while the unemployment rate will remain at 4.0%.On Thursday morning, Australia's foreign trade data was released. Exports increased by 1.3% in January, which was 0.1% higher than in December, while imports decreased by 0.3% after rising by 5.9% in the previous month. As a result, the trade surplus expanded from 4.92 billion to 5.62 billion Australian dollars, exceeding expectations of 5.50 billion. Market participants also assessed the data on the number of building permits, which increased by 6.3% month-on-month and 21.7% year-on-year in January, compared with 1.7% and 12.2% a month earlier.Investors continue to analyze the minutes of the last RBA meeting, at which the rate was reduced by 25 basis points to 4.10% for the first time since the beginning of the COVID-19 pandemic. The head of the regulator, Michelle Bullock, noted the stability of the labor market, but expressed doubts about the return of inflation to the target 2.0% at lower rates, especially against the background of uncertainty caused by the US tariff policy. According to the ASX rates indicator, the market estimates the probability of another 25 basis point rate cut at the next meeting on April 1 at 14%.AUD/USD technical analysis for todayOn the daily AUD/USD chart, the Bollinger indicator shows a horizontal reversal, which indicates a narrowing of the price range. The MACD indicator is growing and holds a strong buy signal. Stochastic maintains its upward momentum, but is approaching the overbought zone, which indicates a possible correction in the short term.Trading recommendations- It is advisable to enter the purchase after the breakdown of the 0.6373 level upwards with a target of 0.6450. It is recommended to set the stop loss at 0.6330.- An opportunity for sales will appear in the event of a rebound from the 0.6373 level and a breakdown of the 0.6330 level downwards with a target of 0.6250. In this case, the stop loss should be placed at 0.6373.