Euro touches parity for the first time in two decades but so far without break lower
The Euro is wobbling at parity level, but so far without clear break lower.
The sentiment remains very negative and was additionally hit by terrible German ZEW data which showed investor morale collapsed in July.
Traders also focus on Wednesday’s release of US June CPI data, with forecast for further rise of inflation to add to Fed’s firmly hawkish stance and further additionally boost the greenback.
Dollar’s rise seems to be unstoppable that heavily weighs on the single currency, which is hesitating at critical psychological support (the Euro was last time below parity in Dec 2002).
Oversold studies contribute to the headwinds that bears face at this zone, though mild reaction can be expected, as downside pressure is massive, with deteriorating economic conditions in the bloc to keep the downside at strong risk.
Potential upticks are likely to remain under falling 10DMA (1.0261) to keep bears fully in play for final break through parity level and offer better selling opportunities.
Eventual break of parity level would open way for deeper drop and expose next target at 0.9607 (Sep 2002 low).
Res: 1.0054; 1.0116; 1.0183; 1.0221
Sup: 1.0000; 0.9944; 0.9859; 0.9607