EURUSD breaks parity! The USD dominance has pushed price into this area but, will the price continue below the major level or bounce?
Watch the video to learn more…
The EURUSD price has finally broken through the key parity level. This level was likely to be tested as the USD continues to dominate the FX markets. The recent CPI data out of the US showed another increase in inflation, this could push the Fed into hiking rates by more than 75bps in their next meeting. The ECB has taken a more relaxed approach to rates recently which has seen the EURO fall. Not only this but risk has risen with the Euro due to the recent halt of gas flows from Russia. The market could see this as a bigger problem than inflation currently.
The price has broken through the parity level but has climbed back above as buyers look to defend the level. This could only be a temporary move higher as fundamentally the USD is stronger than Euro. If the price was to rally back to recent minor highs we could see sellers re-enter the markets. Bearish price action would need to form in these areas, but a break below parity is more likely as risk remains.
Did you see our USDCAD analysis? You can watch it here…
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