EURUSD backs off from highs as Lagarde as growth forecast lower, inflation forecast higher

The focus is on the EURUSD as Lagarde presser continues. The ECB forecast lower growth in 2022 and much higher inflation.

The price action in the EURUSD has seen a move back lower after the market initially tested the old swing lows from January and February 2022. The February 2022 swing low came in at 1.1106 while the January 2022 swing low was at 1.11207. In March, the price has traded above and below those levels earlier in the month but moved away to the downside on March 3.

With the recent run up, the price today retested those old lows and found willing sellers on the first look.

On the downside, the 200 hour moving average was broken yesterday for the first time since February 23 (to the upside). The corrective lows today did see brief moves below that moving average but only by a few pips. The buyers were leaning against that level.

The 200 hour moving average will remain a key barometer for buyers and sellers on the downside. Move below with more momentum and I would expect the buyers to turn to sellers and give up on the upside at least in the short term.

For now, there is disappointment being shown in the rejection of the high resistance area. The prices below the 38.2% retracement of the move down from the February 10 high at 1.1068 is a more bearish tilt. However, with the press conference ongoing, there could be up and down  volatility 
Volatility

In terms of trading, volatility refers to the amount of change in the rate of an index or asset, such as forex, commodities, stocks, over a given time period. Trading volatility can be a means of describing an instrument’s fluctuation. For example, a highly volatile stock equates to large fluctuations in price, whereas a low volatile stock equates to tepid fluctuations in price. Overall, volatility is an important statistical indicator used by many parties, including financial traders, analysts, and brokers. Volatility can be an important determinant in developing trading systems, protocols, or regulations.In the retail space, traders can be successful in both low and high volatile environments, however the strategies employed are often different depending upon volatility. Is Volatility Good or Bad? In the forex space, lower levels of volatile across currency pairs offer less surprises, movements, and are suited to certain types of individuals such as position traders.By extension, high volatile pairs are attractive for many day traders. This is due to rapid and strong movements, which collectively offer the potential for higher profits.However, the risk associated with such volatile pairs are manifold. Of note, volatility with instruments or indices can and do change over time. There can be periods when even highly volatile instruments show signs of flatness, with price not really making headway in either direction. For example, certain months in the summer are associated with low trading volatility.Too little volatility is just as problematic for markets as too much. Too much volatility can instill panic and create its own issues, such as liquidity constraints.A famous example of this are considered Black Swan events, which have historically roiled currency and equity markets.

In terms of trading, volatility refers to the amount of change in the rate of an index or asset, such as forex, commodities, stocks, over a given time period. Trading volatility can be a means of describing an instrument’s fluctuation. For example, a highly volatile stock equates to large fluctuations in price, whereas a low volatile stock equates to tepid fluctuations in price. Overall, volatility is an important statistical indicator used by many parties, including financial traders, analysts, and brokers. Volatility can be an important determinant in developing trading systems, protocols, or regulations.In the retail space, traders can be successful in both low and high volatile environments, however the strategies employed are often different depending upon volatility. Is Volatility Good or Bad? In the forex space, lower levels of volatile across currency pairs offer less surprises, movements, and are suited to certain types of individuals such as position traders.By extension, high volatile pairs are attractive for many day traders. This is due to rapid and strong movements, which collectively offer the potential for higher profits.However, the risk associated with such volatile pairs are manifold. Of note, volatility with instruments or indices can and do change over time. There can be periods when even highly volatile instruments show signs of flatness, with price not really making headway in either direction. For example, certain months in the summer are associated with low trading volatility.Too little volatility is just as problematic for markets as too much. Too much volatility can instill panic and create its own issues, such as liquidity constraints.A famous example of this are considered Black Swan events, which have historically roiled currency and equity markets.
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