empty
20.04.2022 11:00 AM
EUR/USD: euro avoids deep fall while dollar remains strong

This image is no longer relevant

The single European currency recovered slightly after a strong fall. Now it is trying to develop an uptrend. At the same time, the greenback remains strong despite a short-term decline.

The euro is mainly pressured by two fundamental factors: the difference in the strategies of the European and American central banks and the ongoing Russia-Ukraine conflict. In these conditions, the risk-off sentiment is getting stronger, thus putting additional pressure on EUR. As a result, investors prefer the US dollar which makes it even more attractive as a safe-haven asset.

The difference in the monetary policies of the Fed and the ECB supports the US currency. This is the main factor to determine the trajectory of the EUR/USD pair in the near future. The geopolitical instability is another factor that limits the upside potential of the pair. On April 20, EUR/USD was trading at 1.0820 after recouping its previous losses.

This image is no longer relevant

Currently, the euro is trading 12% above the so-called Death Cross chart pattern that has formed over the past month. Against this background, experts see a further decline in the euro/dollar pair in the short and medium terms. A rise in the 10-year Treasury yield is another risk factor for the pair that pushes it into the bear market. For your reference, the yield on the 10-year Treasury note has recently reached 2.9%, its highest level since December 2018.

The US dollar seems to be more resilient compared to the euro. The greenback has managed to withstand both internal and external impact and maintain its leading position. Apart from the geopolitical instability, the current uptrend in USD is sustained by the upcoming monetary tightening by the Fed. The dollar also gains strength from the fact that it is considered a major currency used in international settlements. Experts are sure that nothing can threaten the dominance of the US dollar in the near future.

Expectations of higher inflation also support the US currency. According to Bob Schwartz, senior economist at Oxford Economics, inflation in the US has not reached its peak yet and could accelerate to 9%. In March, the indicator stood at 8.5%. By the end of the year, the inflation rate is expected to decline to 5%, the expert believes.

In this situation, markets will count on the Fed to take a more aggressive approach. The majority of analysts (90%) expect the regulator to raise the rate to 0.75%-1% at its May meeting. This step may help stabilize the EUR/USD pair.

Larisa Kolesnikova,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

Stock market rollercoaster: AMD soars, American Eagle falls, investors are confused

Indices mixed: Dow down 0.21%, S&P 500 up 0.10%, Nasdaq up 0.72% European stocks fall after four sessions of gains American Eagle Outfitters falls after withdrawing fiscal year guidance

Thomas Frank 12:59 2025-05-15 UTC+2

US Market News Digest for May 15

Shares of JPMorgan Chase continue to climb steadily towards the 295.25 level, supported by strong investor demand and solid financial results from the bank. This positive momentum stems from broader

Ekaterina Kiseleva 12:35 2025-05-15 UTC+2

US Market News Digest for May 14

IBM stock continues to climb, supported by technical chart signals pointing to a potential move towards the $265.90 level. Investors are showing interest in the company's stock, backed by strong

Ekaterina Kiseleva 12:40 2025-05-14 UTC+2

Europe in the green, Fed under pressure: traders believe in rate cuts

Pause in US-China tariffs lifts sentiment, but concerns remain European stocks rose for the fourth straight session, and global stocks also rose Traders are betting on a Fed rate

Thomas Frank 11:07 2025-05-14 UTC+2

US Market News Digest for May 13

Citigroup shares are posting steady gains after breaking above key technical levels, signaling potential for continued upside. Market participants view the bank's stock as promising amid signs of stabilization

Ekaterina Kiseleva 12:38 2025-05-13 UTC+2

NRG Energy soars after $12 billion deal — new players in energy?

Indices rise: Dow 2.81%, S&P 500 3.26%, Nasdaq 4.35% Stocks outperform safe havens on trade easing Apple rises on report of considering iPhone price hike Wall Street fear gauge dips

Thomas Frank 12:11 2025-05-13 UTC+2

US Market News Digest for May 12

US stock indices are advancing on a wave of optimism surrounding potential progress in trade negotiations between Washington and Beijing. Investors are hopeful that an eventual agreement could ease geopolitical

Ekaterina Kiseleva 15:25 2025-05-12 UTC+2

Hope for Trade Peace: How US-China Talks Have Rocked European Stock Exchanges

Markets rise: US and China are getting closer in trade talks. UniCredit in the green: profit above expectations, forecast raised. Pharmaceuticals weaken: shares of large companies fell by 1-5%. Futures

Thomas Frank 11:02 2025-05-12 UTC+2

US Market News Digest for May 8, 2025. US stock indices close higher on trade deal optimism

Major US stock indices ended the session in the green, supported by statements from Donald Trump indicating progress in negotiations over a major trade agreement. The market interpreted this rhetoric

Ekaterina Kiseleva 14:00 2025-05-08 UTC+2

Gold slips, stocks sink: what India, Germany and the Fed have in common

Equities are falling on stalled tariff agreements ahead of the Fed decision. Gold is sliding on renewed US-China talks. UK and India have clinched a major trade pact. Friedrich Merz

12:36 2025-05-07 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.