(MENAFN- Daily Forex) We expected that the euro's current gains against the US dollar EUR/USD may be subject to collapse at any time. Concerns about the energy future in the eurozone remain as long as the Russian-Ukrainian war continues. The pace of the recent euro-dollar gains around the parity price stopped again. The bulls did not find enough to complete the rebound, as the stronger US economic data is still supporting the path of tightening the US Central Bank policy. It was subjected to selling operations that moved towards the support level 0.9835 before settling again around the resistance is 0.9885.Lows being Manipulated
It's too early to call for a pivot in the analysts say, with one warning of new lows being manipulated over the coming weeks. In this regard, analysts at Credit Suisse say that the EUR/USD is still in a downtrend and the 'financial difficulties' facing the eurozone mean that the bottom is not yet reached.
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They say a counter-trend retracement should be expected at 4%, based on precedent. The findings, reported in the monthly FX Market Research Report, confirm that the euro's recent rally is likely to be short-lived and that betting on a 'pivot' in this market is premature.“EUR/USD remains in a downtrend with levels as low as 0.9200 possible if financial difficulties rise or energy difficulties related to Russia worsen,” says Shihab Galinus, Head of FX Research at Credit Suisse.
The analyst added that the possibility of 'short-term, short-term coverage' should be expected.
The 2022 low for the EUR/USD pair was reached at 0.9535 on September 28, but an improvement in global risk sentiment dampened demand for the safe-haven dollar, leading to profit taking and the recovery to the upside. The US dollar came under particular pressure on Tuesday after the release of some weaker-than-expected US labor market statistics, encouraging market participants to question whether the economy is now slowing enough to prompt the Federal Reserve to reconsider its rate hike policy.
“Weaker-than-expected US job openings yesterday combined with a lower-than-expected rate hike from the Reserve Bank of Australia sparked a round of speculation that the Fed might also be willing to adjust the range of its interest rate hikes,' but Foley says it's too early to call a pivot in Fed policy, and with it the euro/dollar pivot.
Galen adds, “We prefer to sell on rallies in the euro-dollar to 1.0000.” Based on this view, since the market is now 50 pips away from parity, traders are betting on further declines in EUR/USD and will look to re-enter around current levels. Euro dollar forecast today:
According to the performance on the daily chart,
- The EUR/USD price is still looking for stimulus to confirm breaking the general trend, which is still bearish.
- The breakout of the parity price will have an opportunity for the bulls to actually prepare to break the current descending channel, even if temporarily.
- On the other hand, breaking the support level 0.9745 is important to confirm that the bears are moving strongly and the markets are ignoring the arrival of technical indicators at the time, towards oversold levels.
In general, the euro against the dollar will remain under downward pressure until the announcement of the US jobs numbers, which have a strong and direct reaction to the expectations of raising US interest rates.
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