The EUR/USD pair has been under intense pressure in the past few weeks as the ongoing unraveling of the euro continues.
Enter your emailThere is a likelihood that it will continue falling as bears target the next key support at 1.0745.Timeline: 1 day.pair has been under intense pressure in the past few weeks as the ongoing unraveling of the euro continues.GET STARTEDThe euro has been in a strong bearish trend against key currencies in the past few months. It has fallen to the lowest point since January 2015 against the Swiss franc.
The sell-off of the EUR/USD is mostly because the European Union is currently exposed to the ongoing crisis in Ukraine. European companies like Renault, BASF, and Mercedes Benz have been hurt harder than their American peers. At the same time, the region will be affected as the crisis in Russia leads to more supply chain challenges in the region. Most importantly, the region is seeing higher gas prices than in other places because of their overreliance on the Russian market.
Therefore, the main concern among investors is that of stagflation, which happens when a period of high inflation is accompanied by slow economic growth. This situation will then put the ECB in a bind about its monetary policy since an aggressive policy could lead to a recession. The EUR/USD will react mildly to the latest Eurozone GDP numbers by Eurostat. The impact of these numbers will be a bit mild since the second reading are usually not all that different from the first one. The initial prediction was that the economy expanded by 4.6% in the fourth quarter while the employment change rose to 2.4%. The pair will also react to new developments in Ukraine.The sell-off gained steam when the pair moved below the previous YTD low of 1.1125.