One can argue that this has been coming after the euro suffered a failure in its latest breakout above the swing region around 1.0283 two weeks back.
One can argue that this has been coming after the euro suffered a failure in its latest breakout above the swing region around 1.0283 two weeks back. The push higher stalled at the 61.8 Fib retracement level at 1.0361 and quickly reversed, with the dollar also gaining solid momentum across the board against the rest of the major currencies.
The break back below 1.0100 was all but confirmation of a move heading back towards parity and we’re now within striking distance of parity again. The last time we got here was back in July but I fear that this time around, it isn’t just going to be a case of touching base with the key psychological level.
There’s no need to beat around the bush. The outlook for the euro area region and the euro currency is rather bleak. I’m struggling to think of positives here and unless there is a material change to that, the path of least resistance seems to be a move lower for EUR/USD
EUR/USD
The EUR/USD is the currency pair encompassing the European Union’s single currency, the euro (symbol €, code EUR), and the dollar of the United States (symbol $, code USD). The pair’s rate indicates how many euros are needed in order to purchase one dollar. For example, when the EUR/USD is trading at 1.2, it means 1 euro is equivalent to 1.2 dollars. Why the EUR/USD is the Most Popular Trading PairCompared to all tradable currencies, the euro (EUR) is the world’s second most traded currency, behind only the US dollar. This currency pair is the most traded and liquid currency pair on the market.As the most popular trading pair, the EUR/USD is a staple of every brokerage offering and often has some of the lowest spreads relative to other pairs. Ultimately, the currency follows the two most economic blocs in the world and sees the most volume for this reason.The EUR/USD has a wide range of factors that influence its rates. From the EUR side, economic data in the Eurozone as well as internal factors in the bloc can easily impact rates. Even small member states can effectively weigh on the EUR, as seen in Greece during bailout talks in the 2010s. Alternatively, developments in the United States and the Federal Reserve commonly affect the EUR/USD. Many examples include the bailouts during the Financial crisis, tax cuts during the Trump Administration, and Covid-19 relief measures, among others.
The EUR/USD is the currency pair encompassing the European Union’s single currency, the euro (symbol €, code EUR), and the dollar of the United States (symbol $, code USD). The pair’s rate indicates how many euros are needed in order to purchase one dollar. For example, when the EUR/USD is trading at 1.2, it means 1 euro is equivalent to 1.2 dollars. Why the EUR/USD is the Most Popular Trading PairCompared to all tradable currencies, the euro (EUR) is the world’s second most traded currency, behind only the US dollar. This currency pair is the most traded and liquid currency pair on the market.As the most popular trading pair, the EUR/USD is a staple of every brokerage offering and often has some of the lowest spreads relative to other pairs. Ultimately, the currency follows the two most economic blocs in the world and sees the most volume for this reason.The EUR/USD has a wide range of factors that influence its rates. From the EUR side, economic data in the Eurozone as well as internal factors in the bloc can easily impact rates. Even small member states can effectively weigh on the EUR, as seen in Greece during bailout talks in the 2010s. Alternatively, developments in the United States and the Federal Reserve commonly affect the EUR/USD. Many examples include the bailouts during the Financial crisis, tax cuts during the Trump Administration, and Covid-19 relief measures, among others. Read this Term.
On the daily and weekly charts, the 1.0000 mark is obviously the key one to watch in the sessions ahead. The July low at 0.9952 will also be a technical support to be wary of but nothing comes bigger than parity for the pair at the moment. If we do see a break to the downside, the drop could quickly accelerate towards 0.9800 next at least.