- The dollar gains momentum in the European session, while Wall Street futures fall.
- The euro under pressure in the face of the energy crisis.
- EUR/USD threatens to end multi-day range.
EUR/USD is falling on Tuesday and threatens to end several days of sideways moves. The pair first broke below 1.0200 and recently 1.0175, reaching as low as 1.0135, the lowest since Friday.
This occurs in a climate of caution in the markets and a strengthening dollar. The common European currency also posted new daily lows against the Swiss franc and the pound.
The crisis for energy prices and gas supply continues to weigh on market sentiment. The countries of the European Union agreed to reduce the use of gas by 15% for next winter in the face of the prospect of a total cut in Russian supply.
The German 10-year bond yields are at 0.95%, Low since late May. Those in the US also fell but at a slower rate. This is another factor that is weighing on the pair.
The economic calendar is shown with several events ahead for Tuesday. The International Monetary Fund will publish its new global growth forecasts and in the US the S&P CoreLogic Case-Shiller home price reports, the new home sales report, the Conference Board consumer confidence and the manufacturing index of the Richmond Fed.
In any case, the focus is on the two-day FOMC meeting, which starts on Tuesday. On Wednesday, the announcement of a rise of 75 basis points is expected.
Short-term technical outlook
The EUR/USD is under pressure and if confirmed at current levels a test of 1.0120 would be expected, whose break would lead to the end of days with lateral tours. Below the next strong support is at 1.0070.
Negative signs could be eased if EUR/USD gets back above 1.0180 and confirms the current sideways channel. If the gains are extended, the euro faces strong resistance at 1.0270. If confirmed above this last level, more uploads would be enabled.
Technical levels
Source: Fx Street
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