Under Double Pressure, Euro Will Fall Below the Parity against Dollar

Summary:

Market expectations of the Fed's interest rate hikes and the intensification of energy scarcity in Europe are putting pressure on the Euro.

SELL EURUSD

Close Time

CLOSED

1.00600

Entry Price

1.00000

1.00943

1.18611 +0.00120 +0.10%

34.3

Pips

Loss

1.00000

1.00945

Exit Price

1.00600

Entry Price

1.00943

Fundamentals

The euro rose slightly by 0.18% on Wednesday, returning above parity against the dollar after briefly falling below it. This was mainly due to the market's concerns about U.S. inflation following the release of the June CPI, which led to a subsequent weakening of the dollar. However, the outlook for the euro is not optimistic. Because of the dollar's opening gap to the upside this morning, the market has been biased toward rate hike expectations. The market expects the probability of a 100-basis point Fed rate hike in July to rise to 80.9%, and parity between the euro and the dollar is almost assured. In addition, because the U.S. Freeport LNG facilities are on fire, the export of natural gas to Europe is disrupted and is expected to shut down for at least 3 months. This will aggravate the problem of energy shortage in Europe. The euro is under overall pressure.

Technical Analysis

In the 1-hour chart, the Euro is in a downside channel in the short term. The lower support is 0.99900, and the strong short-term resistance is 1.00734, which has blocked the euro's rise many times in the previous trading days. In addition, the 100 MA is also around it. As for the indicators, Stoch and DMI show that the euro may rise slightly in the short term, while the Bollinger band shows that there is room for the euro to continue to fall.

EURUSD: Under Double Pressure, Euro Will Fall Below the Parity against Dollar_1

Trading Recommendations

Trading direction: Short

Entry price: 1.00600

Target price: 1.0000

Stop loss: 1.00943

Support: 0.99900/0.99870

Resistance: 1.00382/1.00734/1.01078

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Risk Disclosure

The risk of loss in trading financial instruments such as stocks, FX, commodities, futures, bonds, ETFs and crypto can be substantial. You may sustain a total loss of the funds that you deposit with your broker. Therefore, you should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources.

No decision to invest should be made without thoroughly conducting due diligence by yourself or consulting with your financial advisors. Our web content might not suit you since we don't know your financial conditions and investment needs. Our financial information might have latency or contain inaccuracy, so you should be fully responsible for any of your trading and investment decisions. The company will not be responsible for your capital loss.

Without getting permission from the website, you are not allowed to copy the website's graphics, texts, or trademarks. Intellectual property rights in the content or data incorporated into this website belong to its providers and exchange merchants.

Recent Searches

Top Searches

Markets

News

Analysis

User

24/7

Economic Calendar

Education

Data