EUR/USD: Pair Remains Under Pressure As 23-Year Lows Beckon

The EUR/USD has had a muted start to the week, even as it trades dangerously close to 23-year lows. The pair is down 0.02% currently, after closing the previous week 1.19% lower on a stronger US dollar. 

The currency pair has been weighed down since the beginning of the year by a strong US dollar, kept on bid by interest rate expectations and rate hikes on the part of the Federal Reserve. On the other hand, Europe has had to endure weaker economic sentiment, a war that has broken out on its eastern borders and a hesitant ECB that appears unwilling to raise rates with the speed and intensity of its counterparts across the border not to stoke a recession. Moreover, poor economic data in the last week that saw manufacturing and services PMI data fall to multi-month lows also account for the Euro’s weakness.

This week, the FOMC minutes will be released, shining a light on the possibilities of the Fed policy members’ thinking regarding future rate hikes. In addition, the delayed US employment data will also form a potential fundamental trigger for this pair.

EUR/USD Forecast

The Investingcube S-R indicator has set a potential buy entry at 1.036, coinciding with the support level formed by the 9 May and 13 June 2022 lows. This trade is expected to follow the bounce toward 1.0514, serving as the initial profit target. If the price advances further, it makes contact with the projected TP2 at 1.0565, located just under the high of the 9 May candle. Additional resistance barriers on the daily chart exist at 1.06326, the 5 May high and 1 June low sites.

A contrarian view picks up traction if the price descends below 1.3605, the location of the 12 May/15 June prior lows. Next, the bears would be seeking a push toward the 1.02641 support, the site of a 23-year price low. Attainment of this May 1999 low triggers the stop loss of the S-R indicator. Below this level, an additional harvest point for the bears lies at 1.01464. This is where the previous low of 26 July 1999 is found.