Trading Recommendations and Analysis of EUR/USD on March 27. Euro Prospects Are Crumbling

The EUR/USD currency pair declined further on Thursday and ultimately approached the ascending trend line and the important Senkou Span B line. A breakout of these two lines today would essentially pave the way for the dollar to rise again. However, if the support levels hold against the bearish pressure, the euro could have a chance of a new upward move. Nevertheless, recent weeks have shown how weak the European currency is under the current, grim geopolitical circumstances. Yesterday, the geopolitical backdrop in the Middle East did not worsen, but today, Donald Trump could issue a new order to attack Iran. The five-day deadline that Trump generously granted Tehran on Monday expires today. Since no negotiations or ceasefires have been observed, the US may soon begin strikes on Iranian energy and attempt a ground operation. Thus, geopolitical events clearly do not strengthen the European currency.

Technically, the upward trend is still intact but is hanging by a thread. A consolidation below the trend line would, once again, mean we will not see a normal upward trend. The market continues to ignore all factors except geopolitical ones, which, in most cases, support the dollar.

On the 5-minute timeframe, two sell signals and one buy signal were formed yesterday. The movements throughout the day were weak, making it extremely difficult to profit. Throughout the European session, the pair attempted to form a rebound from the Kijun-sen line before showing a downward movement of 25 pips. However, sellers' joy was short-lived. By half an hour later, a buy signal formed, but it also did not bring any profit to traders.

The last COT report dates back to March 17. The weekly chart clearly shows that the net position of non-commercial traders remains "bullish," but is swiftly declining due to geopolitical events at the beginning of 2026. Traders are dumping the European currency in favor of the US dollar. Trump's policies have not changed, but the dollar is once again acting as a "reserve currency," which is driving a sharp influx of buyers.

We still do not see any fundamental factors supporting the strengthening of the European currency. However, there are plenty of factors for the decline of the American dollar. The war in the Middle East has temporarily made the dollar super attractive, but once this factor loses its relevance, everything could revert to the mean. In the long term, the euro could fall to levels as low as 1.06 (the trend line), but the upward trend remains relevant.

The positioning of the red and blue lines of the indicator continues to indicate a retention of the "bullish" trend. During the last reporting week, long positions for the "Non-commercial" group decreased by 52,800, while short positions increased by 31,200. Consequently, the net position has decreased by 84,000 contracts over the week.

On the hourly timeframe, the EUR/USD pair continues to form a weak and uncertain upward trend that is on the verge of being canceled. New escalations in the Middle East, new shocks in the oil or gas markets, and the expansion of the conflict beyond the Middle East could provoke a new wave of dollar buying; therefore, the current trend is quite formal. Any increase in the European currency now is inherently unstable and depends on Trump's will.

For March 27, we highlight the following levels for trading: 1.1234, 1.1274, 1.1362, 1.1426, 1.1542, 1.1615-1.1625, 1.1657-1.1666, 1.1750-1.1760, 1.1830-1.1837, as well as the lines Senkou Span B (1.1538) and Kijun-sen (1.1563). The Ichimoku indicator lines may move throughout the day, which should be taken into account when determining trading signals. Don't forget to set a stop-loss order at breakeven if the price moves in the correct direction by 15 pips. This will safeguard against potential losses if the signal turns out to be false.

On Friday, no significant events are scheduled in the European Union, while in the US, the University of Michigan consumer sentiment index will be published. Volatility throughout the day may again leave much to be desired unless geopolitical factors intervene.

On Friday, traders may consider short positions if the price consolidates below the Senkou Span B and trend lines, targeting 1.1426. Long positions can be opened with targets at 1.1615-1.1625 and 1.1657-1.1666 if the price bounces off the Ichimoku indicator lines and the trend line.

Support and resistance levels are represented by thick red lines, around which the movement may end. They are not sources of trading signals.

The Kijun-sen and Senkou Span B lines are Ichimoku indicator lines that have been moved to the hourly timeframe from the 4-hour timeframe. They are strong lines.

Extreme levels are thin red lines from which the price has previously rebounded. They are sources of trading signals.

Yellow lines indicate trend lines, trend channels, and any other technical patterns.

Indicator 1 on the COT charts shows the net position size for each trader category.