Fed out-hawks ECB leaving euro open

EUR/USD Analysis Conversation Points

• EUR/USD once again below par.
• The US/EU economic separation favors the USD.

euro fundamental background

America of Tomorrow inflation green so that global markets reverse expectations around less aggressive federal Reserve Pulling the EUR/USD currency pair below par. the previous one flamboyant meeting by European Central Bank (ECB) That was not enough to stop yesterday’s release (and rightly so), with the US economy exhibiting strong fundamentals relative to the Eurozone. The gap between the two economies could widen as Europe faces the threat of a severe energy crisis as the region heads into the winter months.

Today, Electoral Commission President Ursula von der Leyen addressed the European Union (see economic calendar below) discussing the Russian invasion of Ukraine as well as the impending energy crisis. Thus far (at the time of writing), the President of the EC has pledged EU financial support for Ukraine to the value of 100m, as well as stating the need to diversify from Russia as a major energy supplier.

Industrial output for the eurozone is also expected to come in lower than the June print, which can be attributed to higher input costs and lower demand that could replicate the falling economic backdrop in Europe. The day ends with US PPI (over-estimated) and a strong downside may continue to support USD.

EUR/USD Economic Calendar

Source: DailyFX Economic Calendar

technical analysis

EUR/USD Daily Chart

chart prepared by Warren VenkatasIG

EUR/USD price action Are the bulls desperately trying to push back from above? psychologist 1.0000 Support Zones but with the potential for a bullish USD print through the US PPI, the EUR remains further downside and bearish. Displays the current daily candle a long top wick And could point to a weaker Euro, should we look closely at a candle like this, which 0.9854 October 2002 Swing in low view.

Short-term I see some respite for the euro potentially fluctuating around parity, but the long-term outlook remains heavily skewed towards the greenback.

Resistance Level:

Support Level:

IG Client Sentiment Data: Mixed

IGCS shows that retailers are currently long Feather EUR/USDwith 67% Traders are currently holding long positions (as of this writing). At DailyFX we generally take the opposite view of crowd sentiment resulting in a short-term cautious bias.

Contact and follow Warren on Twitter: @WVenketas