EUR/USD falls below 1.0000, to two-day lows

  • A stronger dollar pushes EUR/USD below parity again.
  • Intraday outlook favors the dollar, although the price remains in the recent range.
  • European and US bond yields continue to rise.

EUR/USD was unable to break above 1.0050 and reversed direction, falling to 0.9970, the lowest level in two days. The pair remains below parity with a very short-term negative bias against a stronger dollar.

Inflation in EZ and employment in the US

On Wednesday it became known that inflation in the Eurozone reached a new all-time high, with the annual rate rising to 9.1% in August, higher than the expected 9%. This contributed to adding to the expectations of a more aggressive rise in interest rates by the European Central Bank, when it meets next week. The core index went from 4% to 4.3%. The foregoing caused the yields of European bonds to continue rising and therefore, giving support to the euro. Comments in favor of hikes by ECB officials, such as Nagel, also continue.

In the US, the report of August ADP Employment, the first with a new methodology. The data will serve as a preview for the official employment report for August, with non-farm payrolls. Wednesday will also be the Chicago PMI and Raphael Bostic of the Atlanta Fed, Loretta Mester of the Cleveland Fed and Lorie Logan of the Dallas Fed will speak.

A negative factor for the euro is the energy crisis in Europe. Gazprom, the Russian company stopped the shipments of natural gas to the French Engie SA due to a disagreement over payments. The Russian also reported that it will stop shipments to Germany through the Nord Stream gas pipeline for three days due to maintenance tasks.

Euro loses momentum, but not support

EUR/USD’s recovery from the lows in years failed to confirm above 1.0050. If this level is clearly broken, the euro could extend the upward trend, with a target at the 20-day moving average at 1.0105.

The bullish bias carried by the EUR/USD has lost strength on Wednesday with the drop below the 20-hour moving average of 0.9995. To the downside, next support is seen at 0.9950, which protects the next 0.9900 zone.

Technical levels

EUR/USD

Panorama
Last Price Today 0.9986
Today’s Daily Change -0.0029
Today’s Daily Change % -0.29
Today’s Daily Opening 1.0015
Trends
20 Daily SMA 1.0117
50 Daily SMA 1.0206
100 Daily SMA 1.0414
200 Daily SMA 1.0815
levels
Previous Daily High 1.0055
Previous Daily Minimum 0.9982
Previous Maximum Weekly 1,009
Previous Weekly Minimum 0.9901
Monthly Prior Maximum 1.0486
Previous Monthly Minimum 0.9952
Daily Fibonacci 38.2% 1.0027
Daily Fibonacci 61.8% 1,001
Daily Pivot Point S1 0.998
Daily Pivot Point S2 0.9944
Daily Pivot Point S3 0.9907
Daily Pivot Point R1 1.0052
Daily Pivot Point R2 1,009
Daily Pivot Point R3 1.0125

Source: Fx Street

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