EURUSD is having wild price swings ahead of the ECB meeting, because of the Ukraine war. The sanctions targeting Russia increase the commodity prices overall and stagflation risks as well. Today’s meeting will be a tough one for the ECB because the inflation forecasts most probably will rise while the growth forecast will fall because of the conflict. If ECB won’t turn hawkish the inflation may get out of hand in the coming months and if ECB turns hawkish, economic recovery will be at great risk. It is probably best for ECB to delay any concrete decision for this meeting despite earlier statements. While wild swings continue for EURUSD, the price fall to near -3 standard deviations from the 200-day moving average for the second time since late 2021. This happened 7 times in the past 5 years and usually with pairs. Both deviations from the moving average and re-testing of the major long-term trend are taken into account (monthly closes are the key for the trend), EURUSD might be the near end of a downtrend.

Despite the trend turning signals from the long-term outlook, in the short-term, EURUSD is testing the strong 1.11-1.1150 resistance. As long as this resistance holds, the price may fall to 1.0970 or to the previous dip of 1.08.