EUR/USD lower on firmer dollar, failed breakout bodes ill for the euro

<p style=““ class=“text-align-justify“>The dollar is in charge once again in trading today as traders continue to weigh up recession risks and the Fed outlook in general. The latter was in focus last week amid the slightly softer US CPI data but we have seen the reaction completely faded now as the greenback takes charge again.</p><p style=““ class=“text-align-justify“>As is the case, it seems like the bond market is right once again and FX is following suit as such. The dollar has completed a round lap against the euro in a drop from its 61.8 Fib retracement level at 1.0361 to 1.0130 currently. The latest retreat is a massive blow for the euro as it targeted a breakout, and it exemplifies how bad sentiment is for the single currency.</p><p style=““ class=“text-align-justify“>It’s tough to find any reason whatsoever to like the euro as the economic outlook remains rather dire. At this stage, the ECB has still only delivered a 50 bps rate hike and already it seems like their window to deliver another is closing.</p><p style=““ class=“text-align-justify“>The euro area economy looks to have deteriorated sharply in July and with a looming energy crisis set to befall the region in the winter months, it’s hard to be optimistic towards the end of the year.</p><p style=““ class=“text-align-justify“>Looking at EUR/USD, the next key level to watch will be the short-term support near 1.0100 and if that gives way, parity beckons once more for the pair. And this time, it may not be just a flash in the pan drop below the key psychological level.</p>

This article was written by Justin Low at

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