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22.03.202110:39 Forex Analysis & Reviews: EUR/USD. EU-UK vaccine row may affect the euro

The information background has a wide flow of important events, which encourages speculators to act in the market.

As soon as the European Medicines Agency (EMA) finalized the proceedings over AstraZeneca's COVID vaccine, a new incident emerged due to a shortage.

European Union officials are considering a possible blocking of the supply of AstraZeneca vaccine to Britain from EU facilities until the drug manufacturer fulfills its obligations to supply vaccines to its 27-country bloc.

Let me remind you that the EU has a contract with a company that does not comply with its conditions, thus any vaccines and ingredients produced in European factories will be reserved for local supplies.

The conflict between the EU and the UK has been escalating since AstraZeneca told Brussels that it would not deliver the promised amount of vaccines in the first quarter. Both sides accuse each other of export restrictions and nationalism, posing a risk to the fragile post-Brexit trade relationship.

EU leaders are gathering this week to address the vaccine issue, where Italy and France have already announced that they are studying the issue of restrictions on the export of drugs from the EU, while Ireland, Belgium, and the Netherlands have called for caution and warn about the consequences for European companies in case of harsh actions by the EU.

"All options are on the table, we are in the crisis of the century. We must make sure that Europeans are vaccinated as soon as possible, "said European Commission President Ursula von der Leyen last week.

While the vaccine debate is underway, German Chancellor Angela Merkel plans to propose on March 22 that the federal states extend the lockdown by at least four weeks.

Let me remind you that on March 18, French Prime Minister Jean Castex announced a four-week quarantine in 16 regions in France, including Paris.

Castex called the move a way to halt the third wave of coronavirus.

Based on the information flow received regarding the vaccine and the prolongation of restrictive measures, it can be stated that the euro may well come under pressure, which will lead to the prolongation of the existing corrective course from the peak of the medium-term trend.

Exchange Rates 22.03.2021 analysis

What happens on the trading chart?

The Euro/Dollar currency pair, after slowing down the upward movement within the psychological level of 1.2000, moved to a decline, dropping the euro rate to the 1.1880 mark, which already speaks of high chances of prolongation of the corrective course from the peak of the medium-term trend 1. 2349 ---> 1.1835.

It is worth considering that the existing information background may well grab speculators' attention, which will lead to an acceleration of the downward movement and a breakdown of the local minimum of March 9 (1.1835).

If this situation will also affect the pound sterling, given its high rate and the absence of a full-size correction, the quotes may follow the euro downward, and the information flow associated with the restriction of vaccine supply by the EU will lead to a wave of speculation in the market.

Expectations and prospects

Today the economic calendar is empty, but speculators will monitor the information flow for burning issues, which will definitely lead to sharp price changes.

Working on technical analysis, traders should pay attention to the existing stagnation within the 1.1875 mark, since if the price is kept below this coordinate, a local downward move in the direction of 1.1835 is not excluded - the minimum of March 9.

The main volume of short positions will appear in the market after holding the price below 1.1835 for a four-hour period. In this case, we will talk about the prolongation of the corrective move, and sellers will have a chance to see the price of 1.1650.

Exchange Rates 22.03.2021 analysis

What is happening in the market in terms of indicator analysis and market dynamics?

Analyzing different sectors of time frames, we see that technical instruments on the minute, hourly, and daily time frames signal a sell, which allows for a possible prolongation of the corrective move in the market.

Exchange Rates 22.03.2021 analysis

In terms of market dynamics, a slowdown in volatility is recorded, but at the same time, there is an increase in the coefficient of speculative transactions, which may well lead to an increase in activity in the market.

Exchange Rates 22.03.2021 analysis

Key levels

Resistance - 1.2000 *** (1.1950 / 1.2000 / 1.2050); 1.2150 **; 1.2200; 1.2350 **; 1.2550; 1.2825. Support - 1.1835 *; 1.1650 *; 1.1500; 1.1350.

* Periodic level

** Range level

*** Psychological level

*这里的市场分析是为了增加您对市场的了解,而不是给出交易的指示。

Gven Podolsky,
Analytical expert of InstaSpot
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