EUR/USD Eyes 2022 Lows As Bearish Pressure Mounts
The pair EUR/USD fell sharply on Friday and hit its lowest level in two weeks as the market’s mood worsened amid increasing global recession fear. The euro also took a hard hit after June’s core inflation data in the eurozone came in higher than expected.
Following a recovery attempt during the European session, which reached an intra-day high of 1.0485, the EUR/USD pair turned south and struck its lowest level since June 15 at 1.0365. However, the pair managed to bounce from lows and closed the week at 1.0425, still posting a 0.54% daily loss and a 1.24% weekly decline.
June’s Core CPI in the Eurozone came in hot, with the annual inflation reaching 8.6% from May’s 8.1% and higher than markets expectations of 8.5%. Despite inflation data, ECB tightening expectations softened, with markets pricing a 1.0% deposit rate by the year-end, down from 1.25% at the start of the week.
Across the pond, US ISM manufacturing PMI for June came in lower than expected, with the monthly reading falling to 53, missing the market expectations of 54.9 and fueling growing recession fears.
The 10-year bond yield slumped 4.2% on Friday and closed around 2.889% after hitting a one-month low of 2.791%, signaling higher demand for US Treasury notes as the American economy keeps showing signs of a deceleration. Fed Chairman Jerome Powell warned last Wednesday that there is no guarantee of a soft landing.
From a technical perspective, the EUR/USD holds a bearish technical outlook according to the weekly chart, with the pair posting its fourth weekly loss out of the last five. The daily chart also shows a short-term negative bias as technical indicators remain in negative territory.
The daily RSI shows a negative slope below its midline, while the MACD keeps printing higher red bars, indicating a growing selling interest.
Immediate supports are seen at the cycle low of 1.0349, posted on May 13, and then the 1.0300 psychological level.
On the other hand, the 1.0450 and 1.0500 levels are the next resistances to regain bullish momentum, which would pave the way to the 20-day SMA, currently at the 1.0530 area.
Following a recovery attempt during the European session, which reached an intra-day high of 1.0485, the EUR/USD pair turned south and struck its lowest level since June 15 at 1.0365. However, the pair managed to bounce from lows and closed the week at 1.0425, still posting a 0.54% daily loss and a 1.24% weekly decline.
June’s Core CPI in the Eurozone came in hot, with the annual inflation reaching 8.6% from May’s 8.1% and higher than markets expectations of 8.5%. Despite inflation data, ECB tightening expectations softened, with markets pricing a 1.0% deposit rate by the year-end, down from 1.25% at the start of the week.
Across the pond, US ISM manufacturing PMI for June came in lower than expected, with the monthly reading falling to 53, missing the market expectations of 54.9 and fueling growing recession fears.
The 10-year bond yield slumped 4.2% on Friday and closed around 2.889% after hitting a one-month low of 2.791%, signaling higher demand for US Treasury notes as the American economy keeps showing signs of a deceleration. Fed Chairman Jerome Powell warned last Wednesday that there is no guarantee of a soft landing.
From a technical perspective, the EUR/USD holds a bearish technical outlook according to the weekly chart, with the pair posting its fourth weekly loss out of the last five. The daily chart also shows a short-term negative bias as technical indicators remain in negative territory.
The daily RSI shows a negative slope below its midline, while the MACD keeps printing higher red bars, indicating a growing selling interest.
Immediate supports are seen at the cycle low of 1.0349, posted on May 13, and then the 1.0300 psychological level.
On the other hand, the 1.0450 and 1.0500 levels are the next resistances to regain bullish momentum, which would pave the way to the 20-day SMA, currently at the 1.0530 area.