FX.co ★ Overview of the EUR/USD pair. September 6. The ECB meeting is the key event of the week.

On Friday and Monday, the EUR/USD currency pair traded in the same manner as before. Since the price was able to cross the lower boundary of the anticipated downward channel, the entire action now clearly resembles a "swing." However, the European currency did not suddenly collapse as one might anticipate. Nevertheless, the pair will likely continue to decline if the side channel is overcome. In essence, this is what we have been discussing a lot over the past few weeks. There is now little reason for the European currency to increase, given it is still close to its 20-year lows. The ECB meeting will take place this week, and the rate will probably be raised by 0.75%. Despite the market already knowing this, it is not in a rush to purchase the euro. Also, keep in mind that despite the Bank of England's intention to hike rates for the seventh time after doing so six times in a row, the pound sterling is currently headed straight for its lowest point in 37 years. Therefore, it would seem that even a significant rate increase in the Eurozone would not be enough to stop the euro's long-term downward trajectory.

No matter how much the ECB raises its interest rate at the moment, as we've already stated, the geopolitics and fundamentals of the euro remain the same. In any case, the Fed rate is higher than the ECB rate and will stay that way for a very long time. As a result, the US dollar has every reason to keep rising, at least until the Fed declares the cycle of tightening monetary policy to be over. And with the current US interest rate, this cannot occur before 4%. Geopolitics continues to be problematic. As Moscow announced the suspension of gas shipments to the European Union due to problems with the Nord Stream turbine, a "gas war" between the two parties had already begun. Only Moscow is aware of the true state of affairs. Still, considering that the EU wants to stop buying gas and oil from the Russian Federation, we cannot rule out the possibility that Moscow could initiate the first round of sanctions. In Europe, there may be significant issues with gas in the future, which will hurt the economy.

The ECB anticipates rate increases of 0.5 to 0.75%.

As previously said, the European Central Bank will meet on Thursday this week. It is widely known that the regulator will increase the key rate twice a row. The rate may be increased immediately by 0.75%, according to recent statements made by members of the monetary committee and several central bankers from EU nations. From our perspective, the ECB's decision to begin the fight against inflation is already too late. I was running late after that. It is unclear why there had to be such a long wait. In any case, inflation will take a very long time to return to the desired level of 2%, even if the rate rises at the "pace of the Fed." What impact will the ECB meeting have on the value of the euro? The ECB rate increase might spur a small increase in the euro's value because it has been actively declining in recent weeks. Although traders are aware of the impending rate hike, they are not yet eager to consider this. The meeting's outcomes will be fully anticipated, and we anticipate that the euro will increase marginally.

We may single out the third-quarter GDP report for the European Union as one of the major macroeconomic events this week. Forecasts indicate that it will be as neutral as feasible because the European economy is anticipated to expand by 0.6% q/q. This prediction shouldn't, however, be taken too literally. Both the American and European economies are still on the verge of recession. Simply said, because the ECB began hiking rates later, the economy has not yet started to "cool." Additionally, the European economy would suffer another setback if Brussels's "gas problem" could not be resolved swiftly and effectively. We predict that the GDP won't be higher than expected, and this data won't have any positive financial implications for the euro.

As of September 6, the euro/dollar currency pair's average volatility over the previous five trading days was 107 points, which is considered to be "high." As a result, we anticipate that the pair will fluctuate today between 0.9820 and 1.0034. The Heiken Ashi indicator's upward reversal will indicate a new round of upward momentum.

Nearest support levels:

S1 - 0.9888

S2 - 0.9827

S3 - 0.9766

Nearest resistance levels:

R1 - 0.9949

R2 - 1.0010

R3 - 1.0071

Trading Advice:

The EUR/USD pair is still trading in a flat or "swing" pattern. As a result, it is now viable to trade on the Heiken Ashi indicator's reversals until the price breaks out of the 0.9900–.0072 zone. She still holds a formal position within it.

Here are the explanations for the examples:

Determine the present trend with the use of linear regression channels. The trend is now strong if they both move in the same direction.

The moving average line determines the short-term trend and the direction you should trade at this time (settings 20.0, smoothed).

Murray levels serve as the starting point for adjustments and movements.

Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day.

A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.