EUR/USD Price, Chart, and Analysis
- EUR/USD continues to slide, will 1.1000 bring any relief?
- US Job reports will act as the next, short-term driver.
The Euro is unable to buy a break at the moment with the single currency under pressure from a host of other major currencies. EUR/USD is now 1.1000, a low last seen in May 2020, while the Euro printed its lowest level against Sterling (0.8260) since July 2016. The Federal Reserve and the Bank of England are both hiking interest rates and looking to withdraw pandemic liquidity from their markets, the ECB is stuck and unlikely to raise interest rates until early 2023. The underlying shift in rate hike expectations over the past few weeks has weighed heavily on EUR/USD and EUR/GBP and will continue to do so in the months ahead.
The war in Eastern Europe is also pressing down on the Euro with Germany’s heavy dependence on Russian oil and gas seen as a negative for Europe’s largest economy. With energy prices sky-high, there are growing fears that the German economy may stall, bringing into doubt the ECB’s plan of reducing the zone’s dependence on quantitative easing. Inflation is also rife in Europe – as it is globally – and with slowing growth and rising inflation, the ECB needs to tread very carefully when looking to temper price pressures within the single block. Next Thursday’s ECB monetary policy meeting will be an event to follow closely.
Today’s US Jobs Report (NFP) will need to be followed, although its overall effect on the market is weakening due to the path of future US interest rate hikes being fairly well signposted. The US jobs market is tight and is expected to remain so for the immediate future.
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EUR/USD is pressing down on 1.1000, a psychological level more than a pure technical level, and a confirmed break below here opens up the potential for a longer-term move all the way back down to the pre-pandemic double low at 1.0636.
Lessons For Becoming a Better Trader
EUR/USD Daily Price Chart – March 4, 2022
Retail trader data shows 68.93% of traders are net-long with the ratio of traders long to short at 2.22 to 1. The number of traders net-long is 2.65% higher than yesterday and 20.93% higher from last week, while the number of traders net-short is 8.82% lower than yesterday and 12.06% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests EUR/USD prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger EUR/USD-bearish contrarian trading bias.
What is your view on the EURO – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.
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