The euro continued trading near the upper limit of the side channel, showing very low market volatility recently.
The news, stating that consumer sentiment in Germany should remain stable in March of this year, did not really lead to a rise in the euro while many economists expect expectations of the economy to deteriorate in the future.
According to the GfK report, the leading consumer confidence index in Germany was 10.8 points in March 2019 and remained unchanged compared in February, which was fully in line with economists' forecasts.
GfK noted that a number of consumers really understand the increased risks of a recession in the German economy. Thus, consumer expectations regarding the economy in February dropped to 4.2 points from 10.7 points. However, the indicator of expectations regarding revenues grew slightly and amounted to 60.0 points in February against 59.9 points in the previous month.
The French data also inspired some optimism in traders who are counting on a breakthrough of the strong resistance level of 1.1370 and further growth of the European currency.
According to the data, the consumer confidence index in France increased slightly in February of this year, reaching 95 points versus 92 points in January of this year. Economists had expected the January consumer confidence in France to remain unchanged this month. Good consumer confidence has a positive effect on the desire to spend, as well as on the attitude to the economy, which increases consumer spending and stimulates economic growth.
As for the technical picture of the EUR/USD pair, it remained unchanged.
The main task of buyers of risky assets is to break through the maximum of last week and go beyond the level of 1.1370, which is the upper limit of the side channel. Only this will allow us to expect a larger increase in the euro with testing of highs in the region of 1.1400 and 1.1440. In the case of a bearish scenario, which is also likely under the current market conditions, a breakthrough in support of 1.1325 may lead to an immediate sale and an update of 1.1280 and 1.1240 lows of the EUR/USD pair.
In the afternoon, the attention of traders will focus on the speech of US Federal Reserve Chairman Jerome Powell. Today, hearings in the Senate Banking Committee will begin and the following day, he will speak before the Financial Services Committee.
The main questions will concern the prospects of raising interest rates this year to reduce the Fed's balance sheet, as well as price stability.
The direction in the EUR/USD pair, which is very difficult to determine lately, will depend most likely on what Powell says.The material has been provided by InstaForex Company - www.instaforex.com