The first two trading months of the year has seen the EURUSD almost unchanged. During the first month of the year interest rate speculation and extreme dollar bullish bets have acted as a contrarian indicator which sent the EUR/USD retesting the December high. However, February brought a different story as the EURUSD rally was lacking any fundamental backing we saw a gradual pullback erasing all the previous gains. March is set to be an interesting month because we have a strong seasonal pattern that can produce a major EUR/USD swing low. Cycle wise the greenback has the tendency to find a top around mid-March. As of yet, we don’t know what the catalyst for a top in the dollar might be, however, we can make a educated guess and anticipate the Fed to disappoint the markets for not delivering a rate hike. Going forward, we’re going to analyze and disseminate the major news event for the upcoming month that can be the catalyst for higher EURUSD volatility.

“Don’t risk significant money in front of key reports, since that is gambling not trading.” -Paul Tudor Jones

March 2017 EURUSD Risk Events

March will bring several risk events that can be the catalyst for trend developments. Both the Fed and the ECB are scheduled to release their interest rate and monetary policy decisions. There has been a tremendous build-up behind the Fed interest rate expectation which suggests that the risks remain stuck to the downside for the dollar. The Grexit remains a fundamental theme that can blow out at any time and can be the catalysts for higher volatility.

• Thursday, March 9, 2017 – First major risk event of the month is the ECB Governing Council meeting, followed by the interest rate announcement. The ECB has shown little appetite to curb their stimulus package and it’s very unlikely to see big monetary policy changes ahead of general elections in the three of the biggest EU economies.
• Friday, March 10, 2017 – The Non-Farm Payrolls Report is one of the most awaited figures especially for Forex traders. The NFP figures will be used as a barometer for the interest rate expectation which in turn can fuel bigger volatility than expected. The unemployment rate saw an uptick from 4.7% up to 4.8%, but the US added more jobs than expected during the first month of the year. The 224k new jobs add optimism to market participants and this puts the risk to the downside for the US dollar as anything less than 200k NGP figures can jeopardize the possibility of a March rate hike.
• Wednesday, March 15, 2015 – The U.S. Federal Reserve's Federal Open Market Committee (FOMC) announces its interest rate decision. Fed Chairwoman Janet Yellen has said that the next interest rate hike will be “at our upcoming meetings” which basically leaves the door open for a March rate hike, but at the same time this also weighs negatively on the dollar in case the Fed doesn’t deliver on its promises.
• Wednesday, March 15, 2015 – The Dutch general elections will be the source of a lot of anxiety in the markets. Based on the latest polls the far right Freedom Party lead by Geert Wilders is set to become the prime minister of the Netherlands. This is an anti-EU party that seeks to withdraw the Netherlands from the 28-nation bloc, which is negative for the EURUSD exchange rate.
• Friday, March 17-18, 2017 – The Meeting of G20 finance ministers and central bank governors from 17 to 18 March 2017 in Germany. Steve Mnuchin was sworn in as the new US Treasury secretary and he will be attending the G20 meeting. Mnuchin stance on trade and currency wars will be the focal point, particularly if we take into consideration Trump's protectionist language.
• Wednesday, March 22, 2017 – We have the ECB Governing Council meeting, which can be the catalyst for some volatility. Greece’s debt crisis will also be the focus of the ECB council and the market expectation that the EU officials will reach a deal by the end of March.
• Thursday, March 23, 2017 - Fed Chairwoman Janet Yellen is due to speak at the Federal Reserve System Community Development Research Conference. Her remarks for sure will have an echo in the markets and traders need to pay close attention to her speech.
• Friday, March 24, 2017 – The US Core Durable Goods orders have disappointed the market in the past months, but the drop is mainly because of a reduction in demand from the Pentagon. Based on the market consensus we can expect a flat reading of 0.5%.
• Thursday, March 30, 2017 – The final US GDP figures for the last quarter of 2016 are scheduled to be released. The preliminary figures have been revised upwards from 3.3% up to 3.5% which undershoot expectation. The market expectation is for a flat reading butt usually the final figures tend to have less impact on the currency exchange rate.