FX.co ★ Hot forecast for EUR/USD on 17/03/2023

The European Central Bank generally managed to calm the markets. Not so much by increasing the refinancing rate by 50 basis points, but by a clear hint of further growth of interest rates at the same pace. And ECB President Christine Lagarde assured everyone during her press conference that the European banking sector is both stable and sustainable. In contrast to the U.S., where in fact three banks have already gone bankrupt. But then it is absolutely unclear why the single currency has not returned to the values at which it was before the reports on the disastrous state of affairs at Credit Suisse. Moreover, the Swiss bank is not within the area of responsibility of the ECB. The main point is Lagarde's speech. On the one hand, she calmed the markets, but on the other hand, she confused everyone even more. Let's look at her answer to the first question of the journalists, which contained the following wording: "These three components, we never discussed them, we never let them out and they are clearly identified as the three elements that will be taken into account to determine our reaction function going forward." What does she mean by "we never discussed them"? So the ECB is incapable of some kind of improvisation in unforeseen situations? Frankly, such statements are rather alarming. And such feelings are not very conducive to optimism regarding the euro. That is what has kept it rising.

Refinancing rate (Europe):

Data on industrial production in the United States can help the euro recover today. Its growth rate is likely to slow down from 0.8% to 0.2%. Which goes against the White House's plans to transfer production to the United States, as well as U.S. President Joseph Biden's words that the U.S. economy is in excellent condition. As for the inflation data in Europe, there is no sense to consider it since the final data has been published, which should only confirm the preliminary assessment that the market has already considered.

Industrial production (United States):

EUR/USD recovered by more than 50% against the recent collapse. The 1.0500 level serves as support, against which there was a gradual increase in the volume of long positions.

On the four-hour chart, the RSI technical indicator climbed above the 50 midline, which indicates bullish sentiment on the euro.

On the one-hour chart, the Alligator's MAs are headed upwards, which corresponds to the uptrend in the short-term timeframes. On the four-hour chart, the MA lines are intertwined with each other. This signal indicates a slowdown of the downward cycle and transition to an upward cycle.

Outlook

In this situation, the euro can rise further and reach 1.0700. As for more radical price changes, it is necessary to update this week's high

The complex indicator analysis unveiled that in the intraday and short-term periods, technical indicators are pointing to bullish sentiment.