EURUSD Bearish continuation expected
Fundamental Analysis
The European currency is facing ongoing selling pressure, causing EUR/USD to decline below the important level of $1.0800. This analysis is being written while this downward trend continues.
As we've seen in previous sessions, the prevailing cautious sentiment, known as risk-off mood, is being fueled by concerns about the US debt ceiling. This, in turn, is supporting the US dollar and contributing to its upward bias.
The euro is also being weighed down by a more moderate stance from the European Central Bank's (ECB) rate setters. Vice-President L. De Guindos mentioned earlier that the bank has already made most of the necessary tightening measures, despite suggesting the possibility of further rate hikes in the future. On the other hand, A. Müller, who is typically more inclined towards tightening, dismissed the idea of rate cuts in early next year.
In terms of upcoming events, ECB President C. Lagarde is scheduled to speak later today, which is the only notable event in the European region. During the North American session, we can expect the release of Initial Jobless Claims, the Philly Fed Manufacturing Index, Existing Home Sales, and the CB Leading Index. Additionally, FOMC members P. Jefferson, L. Logan, and M. Barr are all scheduled to give speeches.
The movement of the euro's value is expected to closely follow the behavior of the US dollar and may be influenced by any divergences in the interest rate plans of the Federal Reserve (Fed) and the ECB.
Looking ahead, the ECB's hawkish stance continues to support the possibility of further rate hikes, although this view contrasts with a recent slowdown in economic fundamentals in the region.
Notable events in the euro area this week include ECB President Lagarde's speech, which is scheduled for later today, Thursday.
Some important issues to keep in mind include the continuation of the ECB's tightening cycle, which may occur in June and July (and potentially September), as well as the impact of the Russia-Ukraine conflict on the region's growth prospects and inflation outlook. There are also concerns about the risks of inflation becoming entrenched.
Technical Analysis
In regards to technical analysis, we would expect EUR/USD to drop further to the $1.06900 / $1.06600 zone before seeing any true bullish move.
We will be looking at taking a short to that zone in H1 or M15 if we get any pullback (potentially at 1.0800 prize zone, see purple rectangle on chart). We will only take the trade if price provides us with the right price action as confirmation of down move.
The European currency is facing ongoing selling pressure, causing EUR/USD to decline below the important level of $1.0800. This analysis is being written while this downward trend continues.
As we've seen in previous sessions, the prevailing cautious sentiment, known as risk-off mood, is being fueled by concerns about the US debt ceiling. This, in turn, is supporting the US dollar and contributing to its upward bias.
The euro is also being weighed down by a more moderate stance from the European Central Bank's (ECB) rate setters. Vice-President L. De Guindos mentioned earlier that the bank has already made most of the necessary tightening measures, despite suggesting the possibility of further rate hikes in the future. On the other hand, A. Müller, who is typically more inclined towards tightening, dismissed the idea of rate cuts in early next year.
In terms of upcoming events, ECB President C. Lagarde is scheduled to speak later today, which is the only notable event in the European region. During the North American session, we can expect the release of Initial Jobless Claims, the Philly Fed Manufacturing Index, Existing Home Sales, and the CB Leading Index. Additionally, FOMC members P. Jefferson, L. Logan, and M. Barr are all scheduled to give speeches.
The movement of the euro's value is expected to closely follow the behavior of the US dollar and may be influenced by any divergences in the interest rate plans of the Federal Reserve (Fed) and the ECB.
Looking ahead, the ECB's hawkish stance continues to support the possibility of further rate hikes, although this view contrasts with a recent slowdown in economic fundamentals in the region.
Notable events in the euro area this week include ECB President Lagarde's speech, which is scheduled for later today, Thursday.
Some important issues to keep in mind include the continuation of the ECB's tightening cycle, which may occur in June and July (and potentially September), as well as the impact of the Russia-Ukraine conflict on the region's growth prospects and inflation outlook. There are also concerns about the risks of inflation becoming entrenched.
Technical Analysis
In regards to technical analysis, we would expect EUR/USD to drop further to the $1.06900 / $1.06600 zone before seeing any true bullish move.
We will be looking at taking a short to that zone in H1 or M15 if we get any pullback (potentially at 1.0800 prize zone, see purple rectangle on chart). We will only take the trade if price provides us with the right price action as confirmation of down move.
Trade active:
We did get the pullback we were expecting for that short trade, and we are still aiming at the 1.06900 / 1.06600 price zone to be reached by EUR/USD, could be this week or early next week..
