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The Euro Against The Dollar Fell to a Record Low in 20 Years

8/24/2022 1:38 PM

The EUR/USD pair is actively declining, trading around 0.9957. This week, the instrument renewed its 20-year low, consolidating below 0.9950 on the back of continued growth in gas prices, recession risks in the EU, and negative macroeconomic statistics.

Thus, Services PMI in France fell to 51.0 points from 53.2 earlier, Services PMI in Germany fell to 48.2 points from 49.7 points earlier, and the aggregate value for all EU countries dropped to 50. 2 points from 51.2 a month earlier. Business activity in the French manufacturing sector fell to 49.0 points from 49.5 points earlier, in Germany – to 49.8 points, and in the EU – to 49.7 points, down 0.1 points.

By the end of yesterday, the situation changed, and the trading instrument stopped actively falling due to the decline in the US dollar, which began to sell off after the publication of disappointing data on new home sales in the US. Thus, in July, the indicator decreased to 511.0K from 585.0K in June, yielding the forecast of 575.0K. The total drop in sales was 12.6%, the lowest figure since February 2016. Seriously disappointed investors and business activity, which weakened to 44.1 points in the service sector and 51.3 points in the manufacturing sector.

The trading instrument is moving within the global downward channel, falling towards the support line. Technical indicators maintain a stable sell signal: fast EMAs on the Alligator indicator are below the signal line, and the AO oscillator histogram forms downward bars, falling in the sell zone.

Resistance levels: 1.0060, 1.0347. | Support levels: 0.9898, 0.9650.

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