The Euro pair slumps to 21 year low against the Dollar as recession fears build so as to try approach from the psychological level around the price of 1.0000 - then 1 Euro will equal 1 US Dollar. As expected, the EUR /USD pair continues to move in downwards from the level of 1.0398. Yesterday, the pair dropped from the level of 1.0398 (this level of 1.0398 double top) to the bottom around 1.0181. Today, the first resistance level is seen at 1.0283 followed by 1.0347, while daily support levels are seen at the prices of 1.0150, 1.0100 and 1.0000 (psychological level).
According to the previous events, the EUR/USD pair is still moving between the levels of 1.0350 and 1.0000 for that we expect a range of 350 pips. If the EUR/USD pair fails to break through the first resistance level of 1.0283, the market will decline further to 1.0150. This would suggest a bearish market because the RSI indicator is still in a positive area and does not show any trend-reversal signs. The pair is expected to drop lower towards at least 1.0100 with a view to test the daily support 2.
The euro is being used less often as a global payment currency, posting its biggest percentage-point drop in more than 20 year, as inflation and the war in Ukraine weigh on its appeal for transactions.
The Euro weakened below 1.05%, the lowest level in 20 years, and is on the verge of hitting dollar parity on growing concerns Russia may cut off gas supply to Europe and plunge the region into recession, which in turn would make it more difficult for the ECB to tighten monetary policy.
Currently, the price is in a bearish channel. This is confirmed by the RSI indicator signaling that we are still in a bearish trending market. As the price is still below the moving average (100). So, the market is likely to show signs of a bearish trend around the spot of 1.0181. Furthermore, if the trend is able to breakout through the second support level of 1.0100. We should see the pair climbing towards the double top (1.0050) to test it. It would also be wise to consider where to place a stop loss; this should be set above the second resistance of 1.0347 (weekly pivot).
Conclusion :
The EUR/USD pair increased within an down channel. Closing below the level of 1.0283 could assure that EUR/USD pair will move lower towards cooling new lows - 1.0150, 1.0100, 1.0050 and 1.0000 (psychological level).
