- EUR/USD breaches below 1.0100 and clinches new lows.
- ECB Visco advocated for a 50 bps (?) rate hike in September.
- It is Payrolls’ day across the Atlantic, yay!
EUR/USD accelerates losses and breaks below the 1.0100 level for the first time since December 2002.
EUR/USD weaker on USD-strength, looks to data
EUR/USD extends the decline for the sixth consecutive session so far on Friday amidst deteriorating conditions in the risk-associated universe, rising speculation of a recession in the euro bloc and intense dollar gains.
No effects on the single currency from hawkish comments by ECB’s Visco, who suggested a larger than 25 bps rate hike at the September event in case inflation conditions do not improve (which looks like the most probable scenario). He also expects (wishes) that inflation could return to the bank’s 2% target in 2024.
In the German money market, the 10y Bund yields appear slightly on the defensive above 1.25% following Thursday’s decent uptick.
In the docket, Italian Industrial Production contracted 1.1% MoM in May and expanded 3.4% vs. May 2021. Later in the session, Chair Lagarde will participate in an event in France.
In the NA session, June’s Nonfarm Payrolls will steal the show seconded by Wholesale Inventories and Consumer Credit Change as well as the speech by NY Fed J.Williams.
What to look for around EUR
Bears maintain the EUR/USD under heavy pressure and the acceleration of the downside opens the door to a probable visit to the parity level sooner rather than later.
Indeed, the pair’s price action remains depressed and keeps closely following rising speculation around a probable recession in the region, dollar dynamics, geopolitical concerns, fragmentation worries and the Fed-ECB divergence.
Key events in the euro area this week: ECB Lagarde (Friday).
Eminent issues on the back boiler: Fragmentation risks. Kickstart of the ECB hiking cycle in July? Asymmetric economic recovery post-pandemic in the euro bloc. Impact of the war in Ukraine on the region’s growth prospects and inflation.
EUR/USD levels to watch
So far, spot is down 0.37% at 1.0118 and faces the next contention at 1.0071 (2022 low July 8) seconded by 1.0060 (low December 11 2002) and finally 1.0000 (psychological level). On the upside, a breakout of 1.0538 (55-day SMA) would target 1.0615 (weekly high June 27) en route to 1.0773 (monthly high June 9).
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
GBP/USD stays below 1.2650 as BoE Governor Bailey testifies
GBP/USD trades in the red below 1.2650 on Tuesday. Although BoE Governor Bailey said a gradual approach to removing policy restraint will help them observe risks to the inflation outlook, the sour mood doesn't allow the pair to gain traction.
EUR/USD remains heavy near 1.0550 amid escalating Russia-Ukraine conflict
EUR/USD stays under heavy selling pressure near 1.0550 in Tuesday's European trading. The US Dollar finds fresh haven demand on escalating goeopolitical tensions amid reports that Kremlin is threatening a nuclear response amid Ukraine's use of Western missiles against Russia.
Gold extends recovery toward $2,640 as geopolitical risks intensify
Gold price builds on Monday's gains and rises toward $2,640 as risk-aversion grips markets amid intensifying geopolitical tensions between Russia and Ukraine. Meanwhile, the 10-year US Treasury bond yield is down more than 1% on the day, further supporting XAU/USD.
Canada CPI expected to rise 1.9% in October, bolstering BoC to further ease policy
The Canadian Consumer Price Index is seen ticking higher by 1.9% YoY in October. The Bank of Canada has reduced its policy rate by 125 basis points so far this year. The Canadian Dollar navigates multi-year lows against its American counterpart.
The week ahead: Powell stumps the US stock rally as Bitcoin surges, as we wait Nvidia earnings, UK CPI
The mood music is shifting for the Trump trade. Stocks fell sharply at the end of last week, led by big tech. The S&P 500 was down by more than 2% last week, its weakest performance in 2 months, while the Nasdaq was lower by 3%. The market has now given back half of the post-Trump election win gains.
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.