- The dollar remains firm in the market in a cautious climate.
- Treasury bond yields continue to fall on demand for safe-haven assets.
- EUR/USD at 20-year lows and preparing to drop below 1.0000.
The EUR/USD is trading just above 1.0000, at the lowest levels since December 2002. The pair went as high as 0.9999, and then bounced back but failed to break above 1.0030, remaining under pressure.
A fall clearly below parity seems to be the way for the euro to continue the current context of risk aversion that strengthens the dollar. Wall Street futures are in negative territory, with average falls of 0.47% and in Europe the main stock markets yield 0.40%.
In addition to fears about the global economic outlook, there is concern about what might happen to the energy situation in Europe. The closure of the Nord Stream 1 gas pipeline for maintenance, cutting off all supply to Germany, puts the region on alert as it is feared that it will not operate again, which could lead to rationing in Germany.
Regarding economic data, in the US there will be no high-impact reports on Tuesday, and June inflation will be known on Wednesday. In Europe, the German ZEW index was released, showing a collapse in economic confidence.
Looking below par
EUR/USD is falling for the second day in a row, and for the seventh time in the last eight days. This pushed several technical indicators to oversold levels. At the moment there are no signs of a rebound or a consolidation.
The firm break below parity is within the possibilities. Below the next strong support can be seen at 0.9930. On the upside, resistances are seen at 1.0030 and 1.0070. A return above 1.0115 (20 4-hour moving average) could relieve bearish pressures.
Technical levels
Source: Fx Street
With 6 years of experience, I bring to the table captivating and informative writing in the world news category. My expertise covers a range of industries, including tourism, technology, forex and stocks. From brief social media posts to in-depth articles, I am dedicated to creating compelling content for various platforms.
