Vasilis Tsaprounis
Independent Analyst
The common European currency moves around to 0,99 levels after the new reaction in the wake of yesterday's heavy losses.
As we mentioned in the previous article, the exchange rate was in the middle of the downtrend channel which has started since May 2021.
The strong upward movement of the previous days with which the pair returned to its threshold 1/1, after a significant reaction of about 500 basis points brought some balance and this was expected and had been reported several times here.
Volatility which has strengthened and the trading range is widening, It is a sign of intense confusion as diferent counterweights act on the pair.
As we have mentioned, a set of data that weigh on the single European currency have been largely digested by the markets, this is why the last reaction of the euro was supported.
Although we had a strong view on the return of pair very soon to the levels of 1/1, this surprised even us with the very rapid speed with which it was achieved.
As it turned out the exchange rate had been under a lot of pressure and losses of 500 basis points below 1/1 turned out to be an excellent opportunity for those who believed in buying the euro.
The picture continues to have a large amount of confusion as macroeconomic data continues to be reported with a mixed picture and European continent continues to receive the biggest problems from the energy and geopolitical crisis.
But as we have mentioned these are largely digested by the markets and in the same time in the American continent the developments are not the best as the concerns about how much the growth will be limited continue to be in the foreground.
In such an environment I see intense volatility to be the main scenario, the pair will find it difficult to go much higher than 1/1 at the moment and i expect new dips to renew my strategy '' buy on new dips " which has not disappointed me.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
EUR/USD drops to multi-month lows below 1.0600 as USD rallies
EUR/USD came under renewed bearish pressure and dropped to its lowest level since March below 1.0600 on Monday. While ECB President Lagarde's cautious comments on the policy outlook forces the Euro to stay on the back foot, the USD benefits from risk aversion and further weighs on the pair.
GBP/USD tests 1.2200 as mood sours
Following a short-lasting recovery attempt in the European session, GBP/USD turned south and touched its weakest level in six months near 1.2200. Following a bearish opening in Wall Street, the US Dollar continues to gather strength and causes the pair to stretch lower.
Gold drops below $1,920 as US yields rally
After climbing toward $1,930 in the European session on Monday, Gold price reversed its direction and turned negative on the day below $1,920. The benchmark 10-year US Treasury bond yield is up more than 2% on Monday above 4.5%, weighing heavily on XAU/USD.
Top 5 cryptocurrencies in the buy zone ARB, ADA, PEPE, SHIB, COMP: Santiment analysts
Bitcoin price tumbled to $26,110, early on Monday, traders are likely to shift their attention to altcoins, looking for price gains. On-chain intelligence tracker Santiment, developed an “Asset Activity Matrix,” a tool that compares over 180 altcoins, to identify assets with high and low activity.
S&P 500 Forecast: Worries abound after index has worst week since March
The S&P 500 index lost 2.93% last week as the Federal Reserve’s (Fed) September 20 policy meeting spooked investors with the central bank’s lack of interest in cutting interest rates anytime soon.