- EUR/USD accelerates losses to the 1.0230/25 band on Monday.
- The dollar gains more strength and rises to multi-day highs.
- Producer Prices in Germany surprised to the downside in October.
Selling pressure continues to dominate sentiment around the European currency and drags down the EUR/USD to fresh two-week lows near 1.0220 on Monday.
EUR/USD weakens due to the purchase of dollars
EUR/USD extends leg lower for the third straight session and prints fresh multi-session lows at the same time, following another positive day in the dollar, which appears to be in bid across the board and propped up by rising yields americans.
The late rebound in dollar demand responds to recent Fed statements, as well as a reduction in the possibility of a 50 basis point rate hike at the December Fed meeting, in favor of another 75 basis point hike. basic points.
In the euro calendar, German Producer Prices contracted 4.2% monthly in October and rose 34.5% year over year. Across the pond, the only major release will be the Chicago Fed’s national activity index.
What to keep in mind around the euro
The EUR/USD sees its downward trend exacerbated to the 2-week low zone due to the resumption of the supply bias in the dollar.
Meanwhile, the European currency is expected to closely follow dollar dynamics, geopolitical concerns and the divergence between the Fed and the ECB. In addition, the revaluation by the markets of a possible pivot in the Fed’s policy continues to be, for the moment, the exclusive driver of the pair’s price.
Returning to the euro area, the growing speculation about a possible recession in the region -which seems to be underpinned by the decline in sentiment indicators, as well as by an incipient slowdown in some fundamental variables- emerges as a major internal obstacle facing the euro on the short-term horizon.
Key events in the euro area this week: Preliminary EMU Consumer Confidence (Tuesday), German PMIs (Wednesday) – German IFO Business Climate, ECB Accounts (Thursday) – Germany Final Q3 GDP Growth Rate, GDP Confidence GfK consumer (Friday).
EUR/USD Levels
For now, the pair is down 0.82% to 1.0238 and a break of 1.0021 (100-day SMA) would have as target 0.9935 (Nov 10 low) on track towards 0.9730 (Nov 3 monthly low).
On the other hand, the next resistance is at 1.0406 (200-day SMA), before 1.0481 (15 Nov monthly high) and finally 1.0500 (round level).
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
