EUR/USD looks weak, drops to multi-day lows near 1.0100

EUR/USD loses further ground and approaches 1.0100.
The greenback reverses the initial decline and surpasses 107.00.
US CB’s Consumer Confidence came at 95.7 in July.

Pablo Piovano FXStreet

Sellers quickly returned to the European currency and dragged EUR/USD to fresh multi-session lows in the vicinity of 1.0100 on Tuesday.

EUR/USD offered ahead of FOMC

EUR/USD rapidly abandoned the area around 1.0250 to retreated nearly 15 cents after EU countries decided to reduce the gas consumption in the next winter, all following the decision by Russian giant Gazprom to cap the supply of gas to the old continent to around 20%.

The decision sparked recession fears in the euro area at the time when the IMF cut the growth prospects for 2023 and several major banks now see the region entering recession at some point in Q4.

Absent releases in the euro area, the US Consumer Confidence tracked by the Conference Board eased to 95.7 in July, while New Home Sales contracted 8.1% MoM in June, or .59M units. Earlier in the session, the FHFA’s House Price Index rose 1.4% in May from a month before.

What to look for around EUR

EUR/USD remains under pressure in the pre-FOMC and threatens to revisit the 1.0100 region amidst the sudden resumption of the demand for the greenback.

Renewed market chatter surrounding the likelihood of an economic slowdown in the euro area in the medium term seems to have resurfaced and weigh on the European currency ahead of the upcoming FOMC event on Wednesday.

In the meantime, the price action around the European currency closely follows increasing speculation of a probable recession in the euro area, dollar dynamics, geopolitical concerns, fragmentation worries and the Fed-ECB divergence.

Key events in the euro area this week: Germany GfK Consumer Confidence (Wednesday) – EMU Final Consumer Confidence, Economic Sentiment, Germany Flash Inflation Rate (Thursday) – Germany Unemployment Change, Unemployment Rate, Flash Q2 GDP, EMU Flash Inflation Rate, Advanced Q2 GDP (Friday).

Eminent issues on the back boiler: Continuation of the ECB hiking cycle. Italian elections in late September. Fragmentation risks amidst the ECB’s normalization of monetary conditions. Performance of the economic recovery post-pandemic in the region. Impact of the war in Ukraine on the region’s growth prospects and inflation.

EUR/USD levels to watch

So far, spot is losing 0.84% at 1.0131 and faces initial contention at 1.0116 (weekly low July 26) seconded by 1.0000 (psychological level) and finally 0.9952 (2022 low July 14). On the upside, a breakout of 1.0278 (weekly high July 21) would target 1.0446 (55-day SMA) en route to 1.0615 (weekly high June 27).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

AUD/USD bulls seem hesitant below 0.7050 ahead of RBA on Tuesday

AUD/USD reverses an Asian session dip on Monday as renewed optimism over Iran diplomacy boosts investor confidence, keeping a lid on the safe-haven US Dollar and supporting the risk-sensitive Aussie. Spot prices, however, remain below the one-month high, touched last Thursday, as bulls wait for the crucial RBA decision before taking fresh positions.

USD/JPY climbs to 158.00 neighborhood as BoJ uncertainty weighs on the JPY

The USD/JPY pair gains some positive traction at the start of a new week, recovering further from Friday's post-Bank of Japan (BoJ) swing low to sub-157.00 levels. The momentum lifts spot prices to the 158.00 neighborhood during the Asian session and seems unaffected by fresh intervention warning from Japan's Finance Minister Satsuki Katayama.

Gold recovers on positive US-Iran headlines

Gold extends its recovery during American trading hours on Monday, supported by falling Oil prices following positive headlines on US-Iran talks. The metal regains ground after hitting a fresh yearly low of $3,870 on Friday and ending October down 6.87%. However, the rebound lacks conviction as the fundamental backdrop continues to raise doubts over a sustained recovery.

Bitcoin braces for US midterm elections as historical sell-offs revive downside concerns

Bitcoin (BTC) braces for the impact of the US midterm elections, just a week after the $6 billion hack from Binance. Historically, congressional elections have negatively affected not just the president’s party but also Bitcoin. In the last 22 midterms, the ruling party has gained House seats only twice, while the three most recent elections coincided with Bitcoin’s bear market bottoms.

Why strong US growth could not stop the bond rally and AI selloff

The US economy grew at a 3.4% annual rate, yet Treasury yields fell and the Nasdaq ended October with its worst monthly performance since March 2025. The market is no longer rewarding capital expenditure simply because it supports growth. Investors are testing whether that expenditure can produce cash flow and returns above the cost of capital.

The 2% inflation target came from a throwaway remark. It now moves trillions

The Federal Reserve's 2% inflation goal grew out of an off-the-cuff remark by a New Zealand politician in 1988. Bond investors still price long-term US debt as if 2% holds, so a change in how the Fed measures inflation would move markets.