Oct 6, 2022
VOT Research Desk
Key News – Insights and Analysis
Level right now: 0.9915
- The parity wall is impassable to the EUR/USD.
- The ECB releases its monetary policy accounts later.
The bears’ effort to break through the support level at 0.9844 during yesterday’s trading session was unsuccessful, and the euro was able to somewhat recoup some of its recent losses. The resistance level of 0.9934 will be tested as of the time of writing this analysis, and a successful breach of this level would open the door for the pair to move toward parity. The most likely scenario for today’s trading session is consolidation in the vicinity of 0.9844 and 0.9934. Conversely, a breach of the 0.9844 support level may signal sell-offs toward 0.9750. The U.S. jobless claims data, which will be released at 12:30 GMT, is macroeconomic news that might have a significant impact on the currency pair.
|
|
||||||||||||||||
After testing and failing to break through parity (1.0000) on Wednesday, the pair of the Euro and the US dollar is back below 0.9900 in early European trade .According to recent reports, Germany is breaking ranks with the EU and providing a EUR200 billion emergency finance package to safeguard consumers and businesses from rising energy costs. The European Commission and a number of member states have criticized Germany’s unilateral action, believing that Germany is borrowing and spending beyond its means, disadvantaged EU members with lower incomes.
At 12:30 BST, the most recent ECB monetary policy minutes will be made available, and they should clarify the central bank’s outlook for the economy going forward. On September 8, the ECB raised its policy rates by 75 basis points and raised their inflation forecasts. Markets now anticipate that the central bank will raise interest rates by another 75 basis points on October 27 and continue to do so until the end of the year.
The EUR/USD rate is still at 1.0000 and is probably going to be below parity in the future. The US dollar is beginning to recover from its recent low as Federal Reserve board members continue to advocate for the central bank’s policy of higher rates for longer. The Euro is still weak and is expected to stay that way. The Fed is still committed to fighting inflation, even if it means putting the economy into a temporary recession, so recent discussion of a possible turn at its upcoming monetary policy meeting is now viewed as highly improbable.
