empty
23.08.2023 07:23 PM
The euro is sinking non-stop

The Eurozone economy has long appeared to be gasping for breath. Its 0.3% growth in the second quarter was driven by successes in Ireland, where international companies are headquartered due to the country's low tax rates. And now, another blow: in August, business activity in the services sector fell below the critical mark of 50 for the first time since the end of 2022. As a result, there's talk in the market of a 0.2% GDP decline in the third quarter, and EUR/USD nearly hit a target of 1.08 based on previously established shorts.

The main culprits for the fall of the Eurozone's composite PMI to 47 were Germany and France. German purchasing managers' indices fell at the fastest pace since the first wave of the pandemic led to an economic shutdown and lockdowns in 2020. Paris reported a third consecutive decline in business activity in the country's manufacturing sector.

Eurozone Business Activity Dynamics

This image is no longer relevant

The grim prospects for the region's economy are compounded by strikes at LNG production facilities in Australia, which threaten to drive up gas prices and revive fears of another energy crisis. At the same time, arguments from ECB centrists in favor of maintaining the deposit rate at the current 3.75% in September are growing. The futures market, following PMI data, lowered its peak expectations, putting pressure on EUR/USD.

In the U.S., on the other hand, the risks of resuming the monetary tightening cycle are growing. Derivatives have increased the likelihood of borrowing costs rising to 5.75% or higher by the end of the year to 39%. The rapid rally in Treasury bond yields to the highest levels in over a decade is pushing the Federal Reserve to take decisive action, even against the backdrop of a significant inflation slowdown.

ECB Deposit Rate Expectation Dynamics

This image is no longer relevant

Investors are waiting for Fed Chairman Jerome Powell to indicate that all options remain open for the Federal Reserve. Whether it's a prolonged hold of the federal funds rate at 5.5% or an increase by another 25 basis points. As a result, the divergence in monetary policy is favoring the "bears" for EUR/USD, as is the difference in economic growth between the U.S. and the Eurozone. Is it any surprise that the main currency pair is plummeting?

This image is no longer relevant

What's next? The demand for the dollar is supported by the strength of the economy and rising Treasury yields. Of course, one might assume that U.S. macro statistics will soon begin to deteriorate, and debt problems will prompt investors to flee to bonds. But when exactly will this happen? Some believe that only one or two acts of monetary tightening have negatively impacted the U.S. economy. Before that, the Fed was simply returning rates to a normal state.

The technical pullback of EUR/USD, provoked by the 'Three Indians' pattern, is gaining momentum. The break of the trendline and the bulls' inability to move above it indicate that a trend breakdown is imminent. A successful test of support at 1.08 will catalyze a further plunge towards 1.066 and 1.052. The recommendation is to sell.

Seleccione el marco de tiempo
5
min
15
min
30
min
1
hora
4
horas
1
día
1
s.
Gana con los cambios en el valor de las criptomonedas con InstaForex.
Descarga MetaTrader 4 y abre tu primera operación.
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    UNIRSE AL CONCURSO

Recommended Stories

El Bitcoin se vende fácilmente

Mientras el mercado debate cómo afectará la legislación sobre las stablecoins, la reanudación de las amenazas arancelarias de Donald Trump deteriora el apetito global por el riesgo y contribuye

Marek Petkovich 13:41 2025-06-02 UTC+2

Los litigios judiciales entre Trump y las empresas sobre los aranceles influirán negativamente en los mercados (existe la probabilidad de que continúe la caída del precio del Bitcoin y del Litecoin)

Los mercados mundiales siguen bajo la fuerte influencia de los acontecimientos que ocurren en Estados Unidos, que tanto en el ámbito político como en el económico se comportan como

Pati Gani 12:57 2025-05-30 UTC+2

Análisis del par GBP/USD. El 30 de mayo. La justicia prevaleció, ¿pero por cuánto tiempo?

El par de divisas el par GBP/USD el jueves se consolidó por debajo de la línea media móvil, mientras que el dólar creció durante tres días consecutivos. Sin embargo, todo

Paolo Greco 07:40 2025-05-30 UTC+2

Análisis del par EUR/USD. El 30 de mayo. Jaque a Donald Trump.

El par de divisas EUR/USD continuó un débil movimiento descendente durante la primera mitad del jueves, pero en la segunda mitad se disparó bruscamente al alza. Vimos un fuerte estallido

Paolo Greco 07:40 2025-05-30 UTC+2

Análisis del par GBP/USD. El 27 de mayo. La libra esterlina se mantiene estable.

El par de divisas GBP/USD continuó su movimiento alcista el lunes. Es importante señalar de inmediato que la situación con el euro es bastante complicada e inestable. El euro

Paolo Greco 07:28 2025-05-27 UTC+2

Análisis del par EUR/USD. El 27 de mayo. El presidente dijo, el presidente cambió de opinión.

El par de divisas EUR/USD reanudó su movimiento alcista durante la sesión del lunes desde la apertura del mercado. Otra caída del dólar estadounidense la semana pasada fue provocada

Paolo Greco 07:28 2025-05-27 UTC+2

El caos en los mercados continuará (hay probabilidad de una continuación de la caída local del #USDX y del precio del oro)

Los mercados continúan actuando a ciegas en medio de las acciones caóticas de D. Trump, quien intenta sacar a EE.UU. de la más profunda crisis integral como el barón

Pati Gani 11:26 2025-05-23 UTC+2

Análisis del par GBP/USD. El 22 de mayo. El mercado vuelve a responder sin ambigüedades a Trump.

El par de divisas GBP/USD continuó su movimiento hacia el norte el miércoles, aunque a primera vista no había razones claras para ello. Sí, el nivel de inflación (el único

Paolo Greco 07:12 2025-05-22 UTC+2

Análisis del par EUR/USD. El 22 de mayo. Un nuevo golpe al dólar: «One big beautiful bill act».

El par de divisas EUR/USD continuó su movimiento ascendente durante el miércoles. El dólar estadounidense lleva cayendo sin pausa por más de una semana, algo que no sucedía en todo

Paolo Greco 07:12 2025-05-22 UTC+2

El Bitcoin se convierte en víctima de estafadores

La confianza en el mundo financiero no solo puede perderla el dólar estadounidense. La información sobre el robo de datos de aproximadamente 197 mil clientes de Coinbase, la mayor plataforma

Marek Petkovich 14:05 2025-05-19 UTC+2
¿No puede hablar ahora mismo?
Ingrese su pregunta en el chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.