• The euro keeps losing ground against the dollar to test YTD low at 1.1665.
  • Higher US yields and a dovish ECB are weighing on the EUR.
  • FX analysts at Rabobank anticipate a further decline towards 1.1600.

The euro is depreciating for the third consecutive day on Tuesday, reaching levels only a few pips above the August 20 low at 1.1663. A stronger USD on the back of higher US bond yields and the surging gas prices in Europe are weighing heavily on the common currency.

The euro suffers against a stronger US dollar

The US bond yields’ positive trend, with the benchmark 10-year note rallying beyond 1.5 is boosting the greenback’s attractiveness for the investors. The Federal Reserve’s signals towards the end of the Quantitative Easing era are pushing US yields higher.

In Europe, the energy crisis, with gas prices surging and with inventories at historical lows is casting doubt about the post-pandemic recovery in the region. Beyond that, ECB’s commitment to the current accommodative stance adds negative pressure on the euro.

EUR/USD: Below 1.1664, next target will be 1.1600 – Rabobank

The Rabobank FX Analysis Team expects the pair to remain under pressure amid the ECB’s dovish policy and the uncertain regional growth prospects: “Given that the prospect of a Fed funds rate at the end is live in the market and given growth concerns in emerging markets, our six-month EUR/USD target of 1.16 looks set to be hit sooner than we had been anticipating.”

Technical levels to watch

EUR/USD

Overview
Today last price 1.1681
Today Daily Change -0.0015
Today Daily Change % -0.13
Today daily open 1.1696
 
Trends
Daily SMA20 1.179
Daily SMA50 1.1784
Daily SMA100 1.1905
Daily SMA200 1.1977
 
Levels
Previous Daily High 1.1727
Previous Daily Low 1.1685
Previous Weekly High 1.1756
Previous Weekly Low 1.1684
Previous Monthly High 1.19
Previous Monthly Low 1.1664
Daily Fibonacci 38.2% 1.1701
Daily Fibonacci 61.8% 1.1711
Daily Pivot Point S1 1.1678
Daily Pivot Point S2 1.1661
Daily Pivot Point S3 1.1636
Daily Pivot Point R1 1.172
Daily Pivot Point R2 1.1744
Daily Pivot Point R3 1.1762

 

 

 

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