(VIANEWS) – EUR/USD (EURUSD) is currently on bearish momentum. At 10:06 EST on Thursday, 8 September, EUR/USD (EURUSD) is at 0.9947, 0.6366% down since the last session’s close.
Why is the EUR/USD pair going down?
The Russian invasion of Ukraine has hurt the euro’s demand. This war in Eastern Europe has tainted the economic outlook in Europe and has pushed energy and food prices upward. The Eurozone relies on Russian oil for much of its energy needs. Additionally, it depends heavily on Ukraine for food. Combined with Western sanctions on Moscow, this war has pushed the price of energy and food up. Now, the West is trying to cut back on this dependency by banning Russian oil products from European markets.
The EUR/USD currency pair follows the performance of the economies in the United States and the EU. When these two economies have different economic growth rates, the value of EUR/USD changes. Interest rate differences between the two governments can push or pull the EUR/USD rate. Another factor that can affect the EUR/USD’s value is the Federal Reserve’s intervention to strengthen the U.S. dollar. This will cause the EUR/USD currency to fall in value.
In the past few months, the euro has been falling against the US dollar. At its peak last year, one euro was worth $1.20. This week, it has dropped to $1.13, where it could potentially be parity with the U.S. dollar. It briefly reached parity against the dollar on Tuesday before falling back below $1 on Wednesday. This depreciation is due to two reasons, according to experts. One of them is soaring prices of oil and gas in Europe, which makes the euro zone more vulnerable to recession.
Energy is Europe’s Biggest Worry
Bloomberg reports that most analysts expect the bank to raise rates by 75 basis points. This is the largest increase in interest rates for more than 20 years. Others expect it to increase by 0.5%. This meeting is coming at a time when the European economy is in trouble. Data from Germany showed that factories orders had dropped for six consecutive months. Further data from Germany showed that manufacturing PMIs and retail sales continued to decline.
Energy is Europe’s biggest worry. Russia declared that it would stop all gas flow to Europe from the weekend. Putin’s government has stated that gas flow to Europe will be resumed once sanctions have been lifted. The result is that European gas prices are at record highs. Investors have been waiting for an economic recession in Europe, as rising energy prices and high interest rates combine.
Martin Kazaks, ECB’s chief economist, stated that a prolonged recession might slow down the rate of hikes. The pair also will respond to a Jerome Powell statement. This will mark his first rate increase since the Jackson Hole Symposium’s highly hawkish move. Analysts predict that he will keep increasing rates over the next few months.
The EUR/USD Clings on to Minor Losses Close to Parity While The ECB Hawks And Fed’s Powell Flex Muscles
EUR/USD traders could witness a volatile day in which the 0.75% ECB interest rate hike may offer some short-term relief before the new downside. This is in a Fed Powell case. EUR/USD’s immediate downside is limited by a descending support line that has been in place since mid-July (at least 0.9880).
EUR/USD (EURUSD) Range
About EUR/USD’s daily highs and lows, it’s 0.58% down from its trailing 24 hours low of $1.00 and 0.709% down from its trailing 24 hours high of $1.00.
EUR/USD’s yearly highs and lows, it’s 0.831% up from its 52-week low and 16.08% down from its 52-week high.
Volatility
EUR/USD’s last week, last month’s, and last quarter’s current intraday variation average was a negative 0.04%, a negative 0.07%, and a positive 0.48%, respectively.
EUR/USD’s highest amplitude of average volatility was 0.52% (last week), 0.43% (last month), and 0.48% (last quarter), respectively.
Forex Price Classification
According to the stochastic oscillator, a useful indicator of overbought and oversold conditions, EUR/USD’s Forex is considered to be oversold (<=20).
Previous days news about EUR/USD (EURUSD)
- Eur/usd aims to recapture 1.0000 magical figure as focus shifts to ECB policy. According to FXStreet on Tuesday, 6 September, “The EUR/USD pair displays a minor correction after printing an intraday high of 0.9970 in the Asian session. “
- Eur/usd forecast: drops to kick off the week but turns around – 06 September 2022. According to DailyForex on Tuesday, 6 September, “The EUR/USD has broken down a bit during the trading session on Monday but turned around to show signs of life. “
- Eur/usd price analysis: bulls have a bumpy road ahead, 0.9980 appears immediate hurdle. According to FXStreet on Tuesday, 6 September, “It’s worth noting that the 50-DMA level surrounding 1.0150 appears the last defense of the EUR/USD bears before giving control to the buyers.”, “Following that, the 61.8% and 78.6% Fibonacci Expansion (FE) of the EUR/USD pair’s moves between late May and early August, respectively around 0.9845 and 0.9700, could challenge the pair’s downside.”
- Eur/usd price analysis: extra gains inevitable on establishment above 1.0000. According to FXStreet on Wednesday, 7 September, “The EUR/USD pair is on the verge of extending its gains as the asset is crossing Wednesday’s high at 1.0011. “, “On an hourly scale, EUR/USD is scaling vigorously higher after a breakout of the Descending Triangle chart pattern. “
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