Bearish Momentum Persists
Momentum remains bearish, and the RSI is just above the oversold level of 30. Candle charts show a sequence of hammer doji patterns, suggesting selling pressure may be easing. Intraday support is seen around 1.1520, with further support expected near 1.15. Resistance is limited ahead of 1.1650, with little resistance between that level and 1.18. The pair is expected to trade in a near-term range between 1.1520 and 1.1620. Recent moves are described as having an aggressive pace. Looking back to early 2025, we saw the market fixated on geopolitical risks that pushed the euro down, even when interest rate outlooks seemed supportive. The 1.1500 level was the key support that traders defended, creating a fragile floor. Today, on March 9, 2026, a similar sentiment pressure is building, but the entire trading range has shifted much lower.Monetary Policy Divergence Builds
The current pressure comes from a clear monetary policy divergence, with the pair now trading around 1.0750. Recent data shows US inflation holding firmer than expected at 3.1%, keeping the Federal Reserve on a hawkish path. In contrast, Eurozone inflation has cooled to 2.2%, giving the European Central Bank more reason to consider easing policy later this year. This sentiment is reflected in the derivatives market, much like it was back then. The one-month risk reversal, a measure of demand for options, now shows a significant premium for euro puts, indicating traders are paying more for protection against a fall. This suggests that buying puts or using put spreads to define risk could be an effective strategy to position for potential weakness. Technically, we see meaningful support forming around the 1.0700 level, which has held on several intraday tests over the past month. We see limited resistance ahead of the 1.0850 area, creating a new, lower range for traders to watch. Given this consolidation, selling volatility through strategies like an iron condor with strikes outside of this 1.0700-1.0850 range may be appropriate for the coming weeks. Create your live VT Markets account and start trading now.
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