- EUR/USD loses more ground and approaches 1.0100.
- The greenback reverses the initial fall and exceeds 107.00.
- US consumer confidence stood at 95.7 in July.
Sellers quickly returned to the European currency and dragged the EUR/USD to fresh multi-session lows around 1.0100 on Tuesday.
EUR/USD offered before the FOMC
The EUR/USD quickly left the area around 1.0250 to retreat almost 15 cents after the EU countries decided to reduce gas consumption in the coming winter, all this after the decision of the Russian giant Gazprom to limit the supply of gas to the old continent at around 20%.
The decision sparked recession fears in the euro zone as the IMF cut growth prospects for 2023 and several major banks now see the region slipping into recession sometime in the fourth quarter.
In the absence of releases from the euro zone, US consumer confidence, according to the Conference Board, fell to 95.7 in July, while new home sales fell 8.1% mom in June, or 0.59 million units. Earlier in the session, the FHFA Home Price Index increased 1.4% in May from the previous month.
What to watch out for around the EUR
EUR/USD remains under pressure ahead of the FOMC event and threatens to revisit the 1.0100 zone amid the sudden resumption of USD demand.
Renewed market chatter around the likelihood of an economic slowdown in the Eurozone in the medium term appears to have resurfaced and weighed on the European currency ahead of the next FOMC event on Wednesday.
Meanwhile, the price action around the European currency closely follows growing speculation about a likely recession in the euro zone, dollar dynamics, geopolitical concerns, fragmentation fears and the divergence between the Fed and the ECB.
Technical levels
For now, the pair is down 0.84% ​​at 1.0131 and faces initial contention at 1.0116 (weekly low Jul 26), seconded by 1.0000 (psychological level) and finally 0.9952 (low Jul 14). of 2022). To the upside, breaking above 1.0278 (weekly high Jul 21) would target 1.0446 (55-day SMA) on the way to 1.0615 (weekly high Jun 27, 2022).
Source: Fx Street
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