EUR/USD remains under pressure near 1.0250

• Selling pressure remains firm around EUR/USD.
• The dollar is trading at multi-session highs when followed by the DXY.
• The Chicago Fed’s national activity index worsened in October.

Bears continue to control the mood in space associated with risk and keep the EUR/USD depressed in the 1.0250 area at the start of the week.

EUR/USD falls to 2-week lows

EUR/USD holds the downside correction for one more session and threatens to challenge key support around the 1.0200 zone sooner rather than later.

In fact, in a fairly quiet session, the USD continued the recent rebound supported by the recent hawkish message from some Fed members, which breathed fresh breath into both the dollar and yields, while dampening optimism around to a possible pivot from the Fed.

Earlier in the calendar, German Producer Prices contracted 4.2%m/m in October and rose 34.5% vs. the same month in 2021. In the US data space, the Fed’s national activity index for Chicago fell to -0.05 in October (from 0.17).

What to watch out for around the EUR

The EURUSD sees its downward trend exacerbated to the area of ​​the 2-week lows by the resumption of the bias of the offers 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 policy continues to be, for the moment, the exclusive driver of the direction of the pair.

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 to which faces the euro on the short-term horizon.

EUR/USD levels to watch

For now, the pair is down 0.69% to 1.0251 and a break of 1.0021 (100-day SMA) would target 0.9935 (10 Nov low) en route to 0.9730 (3 Nov monthly low). Elsewhere, the next hurdle lies at 1.0406 (200-day SMA), before 1.0481 (15 Nov monthly high) and finally 1.0500 (round level).