The EUR/USD currency pair displayed surprising movements on Friday. It's worth recalling that we have often termed the dollar's rise irrational lately; however, in recent weeks, it could be explained by the war in Iran. The market has once again begun to use the U.S. dollar as a safe-haven asset, despite ongoing discussions throughout 2025 about its loss of "safe-haven" status. Nevertheless, a new war has commenced, and the market has not found any alternative to the dollar.
However, what is truly surprising is that the market interprets nearly all factors in favor of the dollar. For example, we saw extraordinarily poor GDP growth rates for the fourth quarter just a week ago. The U.S. economy grew only 1.4% in the first quarter, and on an annual basis, it is growing even more slowly than during Joe Biden's presidency, despite Trump's repeated assertions of an "economic boom" and a "golden age" for America. Last Friday, reports on unemployment and the labor market were released, which should have objectively led to a decline in the American currency. Many analysts dubbed the Non-Farm Payrolls figure of -92,000 as "unexpected," although, in our view, the unexpected figure was January's +130,000. It should be noted that for the entire year of 2025, the American economy created approximately 180,000 jobs. Therefore, the January figure appeared excessively high.
Interestingly enough, for once, the U.S. Bureau of Labor Statistics did not revise the previous month's figure by several tens of thousands. However, a contraction of 92,000 jobs in the labor market, when the normal figure is considered to be +150-200,000, is a failure. Simultaneously, the unemployment rate, which had been decreasing in recent months to the joy of American currency enthusiasts, has also risen. Thus, the labor market is not recovering, and the January gain was simply an anomaly.
The only reason for the U.S. dollar's resilience is the war in Iran. It seems the market is once again poised to respond positively to factors that favor the dollar, while ignoring negative ones. If the market's reaction to fundamentals and macroeconomics is so one-sided, it makes no sense to draw conclusions based on these types of analyses.
This week, the macroeconomic context might once again take a back seat. In the Eurozone, the most important event will be the release of German industrial production figures. Last week, the market effectively ignored critical reports on Non-Farm Payrolls and the unemployment rate, so it is unlikely to pay any attention to European reports next week.
Thus, geopolitical factors will once again take precedence, and understanding what to expect from the EUR/USD pair will primarily depend on technical analysis. If the U.S. begins a ground operation, strikes on Iran become more intense (and Iran retaliates), or other nations become involved in open conflict, these events may once again lead to a rise in the dollar. If no new escalation occurs, at least an upward correction may begin.
The average volatility of the EUR/USD currency pair over the past 5 trading days as of March 9 is 109 pips, characterized as "high." We anticipate the pair moving between 1.1508 and 1.1726 on Monday. The upper regression channel points upward, indicating the upward trend is maintained. The CCI indicator has once again entered oversold territory, signaling a potential resumption of the upward trend.
Nearest Support Levels:
Nearest Resistance Levels:
- R1 – 1.1719
- R2 – 1.1841
- R3 – 1.1963
Trading Recommendations:
The EUR/USD pair continues its correction within the upward trend. The global fundamental background remains very negative for the dollar. The pair spent seven months in a sideways channel, and now it seems time to resume the global trend of 2025. There is no fundamental basis for the dollar's long-term growth. We are currently witnessing another global correction. If the price is below the moving average, small short positions can be considered, with targets at 1.1508 and 1.1475, based on technical grounds and the complex situation in the Middle East. Above the moving average line, long positions remain relevant, targeting 1.1963 and 1.2085.
Explanations for Illustrations:
Regression channels help determine the current trend. If both are pointing in the same direction, it indicates a strong trend.
The moving average line (settings: 20.0, smoothed) indicates the short-term trend and the direction in which trading should currently proceed.
Murray levels – target levels for movements and corrections.
Volatility levels (red lines) – the probable price channel in which the pair will trade over the next 24 hours based on current volatility indicators.
The CCI indicator – its entry into the oversold territory (below -250) or overbought territory (above +250) indicates that a trend reversal in the opposite direction is approaching.
