Around EUR/USD, the selling pressure is still intense. When the DXY follows the dollar, it trades at multi-session highs. In October, the Chicago Fed National Activity Index deteriorated. At the start of the week, bears continued to dominate the risk complex mood and maintained EUR/USD low near the 1.0250 area.
EUR/USD hits a two-week low. For yet another session, the EUR/USD keeps the corrective downward in place and poses a danger to test the crucial support in the vicinity of 1.0200 as soon as possible.
Indeed, in a relatively quiet day, the dollar continues its current uptrend supported by recent hawkish remarks from several Fed speakers, which gave the currency and yields new life while at the same time dampening expectations about a prospective Fed pivot.
German producer prices decreased 4.2% month over month in October and increased 34.5% from the same month in 2021 earlier in the year. The Chicago Fed National Activity Index fell to -0.05 in October, according to US statistics (from 0.17).
What should I look for in the EUR?
Due to the return of the greenback’s buy bias, the EURUSD’s decline is now more pronounced, reaching the region of its two-week lows.
The euro is anticipated to closely track changes in the dollar’s value, geopolitical tensions, and the Fed-ECB divergence in the interim. Additionally, for the time being, the only factor influencing the price movement of the pair is the markets’ re-pricing of a prospective Fed policy shift.
Returning to the euro area, a key home headwind for the currency in the near term, is the growing concern about a probable recession in the area, which seems to be supported by falling confidence indicators and a beginning slowdown in certain fundamentals.
Major occurrences in the eurozone this week: Flash Consumer Trust at EMU (Tuesday) Germany, EMU Wednesday’s advanced PMIs: Germany Germany’s Final Q3 GDP Growth Rate, ECB Accounts, and GfK Consumer Confidence are Thursday’s IFO Business Climate and ECB Accounts releases (Friday).
The continuation of the ECB’s rate hike cycle vs. rising recession concerns are important topics simmering in the background. Impact of the conflict in Ukraine and the ongoing energy shortage on the prognosis for inflation and growth in the area. Risks of persistent inflation.
EUR/USD Levels to Monitor
The pair is now down by 0.69% at 1.0251, and a break of 1.0021 (the 100-day SMA) would lead to 0.9730 after aiming for 0.9935 (the low from November 10). (monthly low November 3). The next barrier, however, is around 1.0406 (200-day SMA), followed by 1.0481 (monthly high November 15), and then 1.0500. (round level).