- EUR/USD falls to fresh five-year lows, downside bias remains intact
- The US dollar remains higher after the rally in USD/JPY.
- The EU-Russia energy crisis is in focus pending German inflation and US GDP.
EUR/USD is trading below 1.0500, sitting at the lowest level since January 2017 having dropped to 1.0481, as bears look to extend the losing streak for a sixth day in a row this Thursday.
The strength of the US dollar remains the dominant underlying theme, which continues to put downward pressure on the EUR/USD pair. The safe-haven currency remains attractive at a time of mounting concerns about global growth amid lockdowns in China and the Fed’s aggressive bets on rate hikes.
However, the latest move higher in the dollar is triggered by the rise in USD/JPY following the Bank of Japan’s (BoJ) decision to stick to its ultra-loose monetary policy decision, despite a weaker yen and rising of inflation.
EU-Russia energy crisis draws buyers’ attention
On the euro side, the Financial Times (FT) reported that European Union (EU) energy producers in Germany, Austria, Austria, Hungary and the Czech Republic are preparing to comply with a new payment system for gas. Russian desired by the Kremlin.
Tensions surrounding the EU-Russia energy crisis have had a downward impact on the euro since yesterday, when EUR/USD fell to a five-year low near 1.0510.
The decline remains firm for the pair as investors continue to ignore the ECB’s hawkish turn amid untold US dollar strength and aggressive tightening calls from the Fed.
The calendar looks busy, with EUR traders awaiting preliminary German inflation data after sentiment data from the bloc. The main risk on Thursday remains the US fourth quarter GDP release, which is likely to show slow growth in the world’s largest economy.
EUR/USD Technical Levels
Source: Fx Street
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