• A combination of factors drags EUR/USD to its lowest level since October 2002 on Friday.
  • Aggressive Fed rate hike bets and the risk-off impulse lift the USD to a fresh 20-year high.
  • Disappointing PMIs from France and Germany fuel recession fears and weigh on the euro.

The EUR/USD pair comes under some renewed selling pressure on Friday and drops to its lowest level since October 2002, around the 0.9765 region during the early European session.

Following the previous day's volatile price swings, the US dollar regains strong positive traction and is seen dragging the EUR/USD pair. In fact, the USD Index, which measures the greenback's performance against a basket of currencies, hits a new 20-year peak and remains well supported by a more hawkish stance adopted by the Fed.

It is worth mentioning that the US central bank signalled on Wednesday that it will likely undertake more aggressive rate increases to cap inflation. This, along with the prevalent risk-off environment, offers additional support to the safe-haven greenback. The market sentiment remains fragile amid growing worries about a deeper global economic downturn.

The euro, on the other hand, is pressured by the risk of a further escalation in geopolitical tensions, especially after Russian President Vladimir Putin announced a partial military mobilization. Apart from this, the energy crisis in Europe, which could drag the region's economy deeper into recession, is also seen weighing on the shared currency.

The market fears were further fueled by the release of worse-than-expected flash Manufacturing PMI prints from France and Germany - the Eurozone's two largest economies. Furthermore, Friday's downfall could also be attributed to some technical selling below the 0.9800 round-figure mark, which might have already set the stage for further losses.

Technical levels to watch

EUR/USD

Overview
Today last price 0.9773
Today Daily Change -0.0058
Today Daily Change % -0.59
Today daily open 0.9831
 
Trends
Daily SMA20 0.9978
Daily SMA50 1.0088
Daily SMA100 1.0292
Daily SMA200 1.0703
 
Levels
Previous Daily High 0.9908
Previous Daily Low 0.9807
Previous Weekly High 1.0198
Previous Weekly Low 0.9945
Previous Monthly High 1.0369
Previous Monthly Low 0.9901
Daily Fibonacci 38.2% 0.9845
Daily Fibonacci 61.8% 0.9869
Daily Pivot Point S1 0.9789
Daily Pivot Point S2 0.9748
Daily Pivot Point S3 0.9689
Daily Pivot Point R1 0.989
Daily Pivot Point R2 0.9949
Daily Pivot Point R3 0.999

 

 

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