Euro Forecast – EUR/USD Plunging Into Parity as US Dollar Bulls Run Amok


EUR/USD Price, Chart, and Analysis

  • US greenback energy accountable for USD-pairs.
  • Data is unlikely to prop up the Euro subsequent week.
  • All eyes are on Fed chair Powell subsequent Friday.

The US greenback is in full management throughout a spread of monetary markets going into the weekend as merchants lastly settle for {that a} Fed pivot any time quickly shouldn’t be going to occur. US Treasury yields stay elevated and bid, whereas the US greenback basket (DXY) trades at highs final seen one month in the past. When you pair the US greenback in opposition to a structurally weak Euro, then additional draw back for EUR/USD seems set as the trail of least resistance.

EUR/USD Slides Further on Energy Woes and US Dollar Flex

The vitality drawback in Europe, touched on above, is getting worse with German year-ahead energy buying and selling at a contemporary document excessive of EUR545/MWH. The German authorities warned that the financial system is stagnating and the outlook is gloomy as vitality costs soar and supply-chain disruptions proceed. Adding to the Euro gloom, German PPI information launched earlier at present confirmed the worth of products and providers offered within the wholesale market soar to document ranges.

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Retail merchants proceed to construct lengthy positions in EUR/USD with net-long positions leaping increased and net-short positions being pared again closely.

Retail dealer information present67.76% of merchants are net-long with the ratio of merchants lengthy to quick at 2.10 to 1. The variety of merchants net-long is 15.11% increased than yesterday and 42.76% increased from final week, whereas the variety of merchants net-short is 10.40% decrease than yesterday and 27.57% decrease from final week.

We usually take a contrarian view to crowd sentiment, and the actual fact merchants are net-long suggests EUR/USD costs might proceed to fall. Traders are additional net-long than yesterday and final week, and the mix of present sentiment and up to date adjustments offers us a stronger EUR/USD-bearish contrarian buying and selling bias.

EUR/USD Parity Beckons Once Again

EUR/USD has already, briefly, damaged parity as soon as this 12 months, and the present set-up means that not solely will this stage be damaged once more however this time the pair might keep beneath 1.000 for longer. The pair proceed to print decrease highs and decrease lows, whereas all three easy shifting averages are pointed decrease in a bearish formation. The CCI indicator exhibits the pair to be closely oversold and this must be washed out earlier than EUR/USD takes the following leg decrease. The first goal is 0.99523, which can not present an excessive amount of assist earlier than 0.9845 and 0.9610 come into play, ranges final seen twenty years in the past.

EUR/USD Monthly Price Chart – August 19, 2022

EUR/USD Monthly Price Chart

What is your view on the EURO – bullish or bearish?? You can tell us through the shape on the finish of this piece or you’ll be able to contact the writer through Twitter @nickcawley1.

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