empty
24.05.2023 04:00 AM
Euro surrenders without a fight

The euro can be both pleasant and unpleasant. It rises, reaching yearly highs against the US dollar, and then falls sharply, reigniting concerns about the return of EUR/USD to parity. Such is life in Forex. Peaks are followed by lows. Bottoms are replaced by new highs. These movements are driven by disappointments and pleasant surprises. In May, the main currency pair encountered a rough patch.

The most significant decline in European PMI in the manufacturing sector since factories were shut down three years ago due to the pandemic hit EUR/USD like a bucket of cold water. The PMI dropped to 44.6. Its dynamics cast doubt on the European Commission's forecast of a 0.4% GDP growth for the currency bloc in the second quarter.

The dynamics of the eurozone PMI

This image is no longer relevant

Unfortunately, the alarming signals from Germany have been confirmed. The economy is disappointing, casting doubt on the recovery of the uptrend in EUR/USD. It couldn't get any worse. The trend could even reverse. If in April it was said that only the US economy was heading towards a recession, now the eurozone is facing the same problem. Add to that the sluggish recovery of China, and the situation begins to resemble global stagflation. Inflation remains high while economic growth is rapidly slowing down. Is it time to flock to the US dollar?

That's exactly what investors are doing. And the EUR/USD bears should not thank the US debt limit issue, but the hawks at the Federal Reserve and the worsening condition of the European economy. After Fed Chairman Jerome Powell and his colleagues spoke, the market is increasingly convinced that the central bank will pause the process of monetary tightening in June and then resume the cycle in July. The chances of a rate hike in mid-summer have jumped to 39%.

Chances of the Fed maintaining or changing rates in July

This image is no longer relevant

Thus, the European economy is disappointing, while the American economy appears more resilient to the Fed's most aggressive monetary tightening in decades. As a result, the European Central Bank may slow down the rate hike process, while their counterparts in Washington are capable of raising borrowing costs even higher. Back in April, the market was confident in the end of the cycle and openly discussed a dovish pivot! How quickly the scenery changes in Forex! Should we be surprised by talks of breaking the uptrend in EUR/USD?

This image is no longer relevant

Technically, this is confirmed by the formation of the "Splash and Shelf" pattern. The trend line of the initial stage has been breached, which shows the bears' intentions. If the main currency pair doesn't find the strength to return to the fair value range of 1.0865-1.1085 in the near future, the risks of a significant change in the uptrend will increase significantly.

In such conditions, we should stick to the strategy of building short positions on EUR/USD from levels of 1.101 and below. The target levels are set at 1.066 and 1.053.

Seleccione el marco de tiempo
5
min
15
min
30
min
1
hora
4
horas
1
día
1
s.
Gana con los cambios en el valor de las criptomonedas con InstaForex.
Descarga MetaTrader 4 y abre tu primera operación.
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    UNIRSE AL CONCURSO

Recommended Stories

Análisis del par GBP/USD. El 6 de mayo. Trump toma el control de la industria cinematográfica.

El par GBP/USD también se negoció al alza durante la primera mitad del día lunes, y a la baja durante la segunda. Aunque esta vez la moneda estadounidense no perdió

Paolo Greco 07:39 2025-05-06 UTC+2

Análisis del par EUR/USD. 6 de mayo. La protesta contra Donald Trump continúa.

El par EUR/USD comenzó un nuevo ciclo de crecimiento el lunes. Probablemente, ya nadie se sorprende por otra caída del dólar estadounidense. El mercado comenzó a vender la moneda estadounidense

Paolo Greco 07:39 2025-05-06 UTC+2

El Bitcoin se ha perdido en el mismo lugar

Donald Trump prometió convertir a América en la cripto capital del mundo, casi organizar un paraíso para los entusiastas del mundo cripto. Sin embargo, en la práctica ha confundido tanto

Marek Petkovich 13:53 2025-05-05 UTC+2

Análisis del par GBP/USD. El 5 de mayo. Reuniones del Banco de Inglaterra y la Fed.

El par de divisas GBP/USD tampoco logró ni subir ni bajar durante el día. Muchos expertos interpretaron los datos laborales y de desempleo de EE.UU. como positivos, simplemente porque

Paolo Greco 08:09 2025-05-05 UTC+2

Análisis del par EUR/USD. 5 de mayo. Nueva semana de sufrimiento para el dólar.

El par EUR/USD el viernes en general se mantuvo en su nivel. Durante el día se observó tanto subida como caída. Para el dólar es una suerte el hecho

Paolo Greco 08:09 2025-05-05 UTC+2

Análisis del par GBP/USD. El 2 de mayo. La divisa estadounidense subió por poco tiempo

El par de divisas GBP/USD continuó cayendo durante el jueves. El dólar fortaleció sus posiciones durante tres días consecutivos, para lo cual objetivamente no había ninguna razón. El contexto macroeconómico

Paolo Greco 07:32 2025-05-02 UTC+2

Análisis del par EUR/USD. El 2 de mayo. Al dólar le espera un nuevo colapso. Y no será el último.

El par de divisas EUR/USD volvió a negociarse el jueves con bastante calma, pero esta vez la divisa estadounidense ya no logró mostrar un fuerte crecimiento. Lo bueno, en pequeñas

Paolo Greco 07:32 2025-05-02 UTC+2

Análisis del par EUR/USD. El 30 de abril. El mayor misterio de 2025 ha sido revelado.

El par EUR/USD continuó negociándose el martes dentro de un rango limitado con una volatilidad bastante baja. En realidad, 80 puntos por día para el euro es un valor

Paolo Greco 07:32 2025-04-30 UTC+2

Análisis del par GBP/USD. El 30 de abril. La democracia ficticia de EE.UU. y el impeachment a Trump.

El par GBP/USD se corrigió ligeramente a la baja después de subir el lunes sin motivo aparente. Sin embargo, llamar a este movimiento mínimo hacia abajo un «crecimiento del dólar»

Paolo Greco 07:32 2025-04-30 UTC+2

EUR/USD. Negociación en rango a la espera de informes importantes

El par EUR/USD lleva ya dos semanas consecutivas operando dentro de la figura 13 (con avances puntuales hacia la figura 14), reaccionando a todos los eventos fundamentales dentro del rango

Irina Manzenko 13:09 2025-04-29 UTC+2
¿No puede hablar ahora mismo?
Ingrese su pregunta en el chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.