EUR/USD continues to trade in the bear market zone, declining within the descending channels on the daily and weekly charts. The lower border of the descending channel on the weekly chart is below 1.0700, near the lows of March 2020.
Probably, this mark can become a reference point for short positions on the pair with intermediate targets at 1.0900, 1.0850, 1.0800, 1.0765.
Economists warn that the new restrictive measures against Russian energy imports will further accelerate inflation in the Eurozone, and the greater the restrictions and possible consequences of sanctions for the energy market, the more negatively this will affect the euro. As the head of the European Central Bank, Christine Lagarde, recently said, “the longer the conflict lasts, the higher the economic costs will be, and the more likely we will be in worse scenarios”.
Market participants do not expect decisive action from the ECB to curb rising inflation.
Soaring energy prices that have increased inflationary pressures, weakening consumer confidence and negative real wage growth in the Eurozone make the ECB's task of finding a balance between stimulating weakened economic activity and containing inflationary pressures much more difficult.
In an alternative scenario, corrective growth may begin after the breakdown of the short-term resistance level 1.1006 with targets at resistance levels 1.1036, 1.1084, 1.1100, 1.1130, near which pending sell orders can be placed.
Support levels: 1.0900, 1.0850, 1.0765, 1.0700, 1.0500, 1.0350
Resistance levels: 1.1006, 1.1036, 1.1084, 1.1130, 1.1200, 1.1285, 1.1300, 1.1335, 1.1415, 1.1500, 1.1550, 1.1740, 1.1780
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Source: InstaForex
