EUR/USD drops below 1.1050, to lowest since May 2020
|- The US dollar remains strong versus GBP and EUR.
- US economic data came in mixed.
- Wall Street fails to hold onto positive ground, turns negative supporting the dollar.
The EUR/USD fell to 1.1046, reaching the lowest level since May 2020. It is hovering around 1.1050, falling for the third consecutive day. The euro and the pound remain under pressure versus the US dollar which gained momentum during the last hour as stocks in the US turned negative.
The S&P 500 is down 0.35% after a positive opening. The reversal took place during the last hour. The cautious tone across markets remains in place as Russian troops continue to attack Ukraine. Reports mentioned US President Biden is ready to impose sanctions on a number or Russian oligarchs.
Economic data released on Thursday came in mixed in the US. Initial Jobless Claims dropped to eight-week lows at 215K. Unit Labor Costs was revised higher from 0.3% to 0.9% in Q4. The ISM PMI Service sector fell unexpectedly from 59.9 to 56.5. Factory Orders rose in January 1.4% (above the 0.7% of market consensus). On Friday, the NFP report is due.
Inflation numbers continue to rise in the Eurozone with the Producer Price Index in January reaching 30% (annual). The European Central Bank (ECB) minutes from the February meeting showed members willing to begin removing monetary stimulus. Next week, it is the board meeting. “Amidst all the uncertainty, we expect the ECB to opt for flexibility by deciding to accelerate the taper of its asset purchases and remove the link between the end of net purchases and the first rate hike”, explained analysts at Nordea.
Short-term outlook
The EUR/USD remains under pressure, under 1.1050, the next support could be seen at 1.1025/30, before the psychological area of 1.1000. A recovery back above 1.1070 would alleviate the bearish pressure. Above the next resistance stands at 1.1105/10.
Technical levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.