Imminent technical recession, the euro will reach parity

  • The pair is trading at the critical support level of 1.0150.
  • Geopolitical tensions between the United States and China continue to rise.
  • There is a 46.5% chance that the Fed will hike rates by 75 basis points.

Today’s EUR/USD price analysis is bearish, in line with gloomier market sentiment. EUR/USD had a lackluster start to the week. The pair continues to slide towards the critical support region which appears to have developed at 1.0150; a breakout of this level would likely attract sellers and pave the way for a deeper decline.

-Looking for automated trading? Check out our detailed guide-

Markets are cautious as geopolitical tensions between the United States and China continue to rise following the weekend visit of US senators to Taiwan. Additionally, China’s poor retail sales and industrial production data reminded investors of the adverse effects of the country’s zero-Covid policy on the economy.

In light of the worsening oil crisis and historically high inflation, Bloomberg reported that economists are now forecasting the euro zone could experience a technical recession on Monday. According to Bloomberg, “the probability of an output contraction for two consecutive quarters has risen from 45% in a previous survey to 60% and 20% before Russia’s invasion of Ukraine.”

On the other hand, there is currently a 46.5% chance that the Fed will raise its key rate by 75 basis points in December, according to the CME Group’s FedWatch tool.

Major EUR/USD events today

Germany’s ZEW Economic Sentiment Index, which measures the six-month economic outlook, will be released today. A value below zero denotes pessimism, which has been the case for some time.

US building permits, which track the number of new building permits issued by the government, are also expected.

EUR/USD Price Technical Analysis: Bears Target 1.01008

Looking at the 4-hour chart, we see a decisive bearish move from the resistance level of 1.03500. Bears broke through the 30-SMA and paused at the 1.01508 support level before pushing below. A close below 1.01508 could lead to lower prices.

-Are you looking for forex robots? Check out our detailed guide-

The RSI is trading near the oversold zone, showing strong bearish momentum. If this momentum continues, the bears will head towards the next level of support at 1.01008. The trend will remain bearish if the price is trading below the 30-SMA and the RSI remains below 50.

Looking to trade forex now? Invest at eToro!

67% of retail investor accounts lose money when trading CFDs with this provider. You have to ask yourself if you can afford to take the high risk of losing your money.

Leave a Reply

%d bloggers like this: