EUR/USD Current Price: 1.0133
- EU authorities are planning to reduce gas use next winter to compensate for the shortage.
- US CB Consumer Confidence is expected to have plummeted to 97.3 in July.
- EUR/USD plunged amid risk aversion and trades near critical support at 1.0105.
The EUR/USD pair lost the 1.0200 threshold and fell to 1.0115, currently trading a handful of pips above the latter. The American dollar appreciated on the back of risk aversion, as concerns about a potential recession continue to affect investors’ mood. US government bond yields remain far below their panic highs, but the yield curve is the most inverted since 2000. 2-year Treasuries are yielding 2.99%, while the 10-year note yields 2.81%. An inverted curve is usually a sign of an upcoming recession.
Meanwhile, tensions between the EU and Russia escalate. The latter has resumed gas provision through Nord Stream 1 after the annual maintenance but reduced the delivery to around 20% of the pre-Ukraine invasion levels. EU countries agreed to reduce gas use for next winter, aiming to cut gas use by 15% in the upcoming six months. Meanwhile, Moscow reported that the missing turbine for the pipeline is on its way after maintenance, but it still has not been installed.
The EU calendar had nothing relevant to offer, while the US will publish the May Housing Price Index, July CB Consumer Confidence, June New Home Sales and the July Richmond Fed Manufacturing Index.
EUR/USD short-term technical outlook
The EUR/USD pair is trading at its lowest in a week and near the 23.6% retracement of its latest daily slide at 1.0105, the immediate support level. The 38.2% Fibonacci retracement provides resistance around 1.0205.
Technically, the daily chart shows that the pair plunged after repeatedly failing to overcome a bearish 20 SMA, which maintains its firmly bearish slope below the longer ones. Technical indicators, in the meantime, have resumed their declines within negative levels, in line with a bearish continuation on a break below the aforementioned support.
The 4-hour chart favors a downward extension, as the pair broke below its 20 and 100 SMAs, both gaining downward traction. Technical indicators head sharply lower within negative levels, reflecting sellers’ strength.
Support levels: 1.0105 1.0070 1.0025
Resistance levels: 1.0155 1.0205 1.0250
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
AUD/USD holds steady near 0.6250 ahead of RBA Minutes
The AUD/USD pair trades on a flat note around 0.6250 during the early Asian session on Monday. Traders brace for the Reserve Bank of Australia Minutes released on Monday for some insight into the interest rate outlook.
USD/JPY: Traders set for rocky 2025 on rediverging interest rates, Trump and North Korea
The Federal Reserve remains the primary driver of USD/JPY and may halt its rate-cut cycle in 2025. Bank of Japan officials will probably refrain from bigger rate hikes. Wild-card politics are set to stir this currency pair, reflecting a duel of safe-haven currencies.
Gold: Is another record-setting year in the books in 2025?
Gold benefited from escalating geopolitical tensions and the global shift toward a looser monetary policy environment throughout 2024, setting a new all-time high at $2,790 and rising around 25% for the year.
Week ahead: No festive cheer for the markets after hawkish Fed
US and Japanese data in focus as markets wind down for Christmas. Gold and stocks bruised by Fed, but can the US dollar extend its gains? Risk of volatility amid thin trading and Treasury auctions.
Bank of England stays on hold, but a dovish front is building
Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.