The pair will likely continue rising as bulls target the key resistance level to watch will be at R2 at 1.035.

Bullish View

• Buy the EUR/USD pair and set a take-profit at 1.0350.
• Add a stop-loss at 1.0225.
• Timeline: 1-2 days.

Bearish View

• Set a sell-stop at 1.0250 and a take-profit at 1.0200.
• Add a stop-loss at 1.0320.

The EUR/USD pair held steady as the market reflected on the significantly weak data from Europe and the US dollar sell-off. It rose to a high of 1.0275, which was the highest level since Junly 5th of this year. The pair has risen by about 3.5% from its lowest level in June.

Weak European Data

The European economy has come under intense pressure in the past few months as the crisis in Ukraine continued. Data published on Monday showed that retail sales in Germany fell at the slowest pace since records started in 1994. They declined by 8.8% in June compared with the same month last year. Sales fell by 1.6% on a month-on-month.

Further data showd that manufacturing PMI in most European countries declined sharply in July. For example, in Italy, the PMI declined below 50. The European manufacturing PMI dropped to 49.8 in July as companies continued facing significant challenges.

The situation will likely continue getting worse as Europe’s gas prices continued rising. Gas prices continued rising as Russia continued squeezing the region. On Sunday, the country stopped supplying natural gas to Latvia.

Europe is now counting on LNG shipments from countries like Australia, US, and Qatar. However, there is a likelihood that supplies from Australia will start falling as the country boosts domestic consumption. Some parts of the country are expected to go through shortages if the ongoing foreign sales continue.

The pair also rose as Italian government bonds rallied as fears of another debt crisis faded. The yield on Italy’s 10-year debt declined below 3% for the first time since May this year. At the same time, the spread between the yields of the Italian and German bond yields narrowd to 2.2%.

The EUR/USD pair continued rising as the US dollar continued falling. Analysts expect that the Federal Reserve will slow its rate hikes considering that the economy is slowing dramatically. Data publshed last week showed that the country sank to a recession in Q2.

EUR/USD Forecast

The four-hour chart shows that the EUR/USD pair rose to a high of 1.0276. This was a notable level since the pair struggled moving above this point several times in July. It is approaching the first resistance level of standard pivot points at 1.029.

It has moved above the 25-day and 50-day moving averages. The pair has formed an inverted head and shoulders pattern. Therefore, the pair will likely continue rising as bulls target the key resistance level to watch will be at R2 at 1.035.

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The pair will likely keep falling as bears target the key support level at 0.6850, which was the lowest level on June 15th.

Bearish View

• Sell the AUD/USD pair and a take-profit at 0.6850.
• Add a stop-loss at 0.7025.
• Timeline: 1-2 days.

Bullish View

• Set a buy-stop at 0.700 and add a take-profit at 0.7050.
• Add a stop-loss at 0.6870.

The AUD/USD price retreated as the dollar strength continued as worries about a global recession continued. The pair dropped to a low of 0.6935, which is about 4.5% below the highest point this month.

Global Recession Worries

The AUD/USD pair has been in a strong bearish trend as investors continued worrying about the rising risk of a recession.

Global central banks like the Federal Reserve and the Reserve Bank of Australia (RBA) decided to ratchet up their rate hikes. Earlier this month, the RBA decided to deliver its interest rate for the second straight meeting. It also signaled that it will keep hiking rates in the coming meetings.

And last week, the Fed made headlines after it decided to deliver its biggest rate in almost three decades. It hiked rates by 0.75% and the Fed chair signaled that it will continue hike interest rates by either 0.75% or 0.50% in the coming meetings.

Therefore, the US dollar has continued strengthening as investors wait for a recession as rates surge. Historically, a combination of high interest rates, low unemployment rate, and high inflation usually leads to a recession.

Leading economic numbers have signaled that the American economy is weakening. The most important one is on housing. Data published last week showed that the country’s building permits and housing starts declined sharply in May.

A few weeks ago, additional data showed that the US retail spending, pending, and new home sales have been weakening. Therefore, there are signs that the weakness will continue as the Fed hikes rates.

The AUD/USD pair is also sliding as commodities retreat. The Bloomberg Commodity Index has dropped from $135 early this month to $127.7. The pair will likely be more muted since US markets will be closed for Juneteeth holiday.

AUD/USD Forecast

The four-hour chart shows that the AUD/USD pair has been in a strong bearish trend in the past few days. The pair has moved below the first resistance line of Andrews Pitchfork. It has also dropped below the 50-day moving average while the Relative Strength Index has moved below the middle line.

The pair has moved below the important support levels at 0.700 and 0.7057. Therefore, the pair will likely keep falling as bears target the key support level at 0.6850, which was the lowest level on June 15th.

There is a likelihood that Ethereum will continue falling as bears attempt to retest last week’s low of $1,705. 

Bearish View

• Sell the ETH/USD and set a take-profit at 1,800.
• Add a stop-loss at 2,300.
• Timeline: 2 days.

Bullish View

• Set a buy-stop at 2,250 and a take-profit at 2,400.
• Add a stop-loss at 1,900.

Ethereum price has been in a consolidation mode in the past few days as investors reflect on last week’s crash of Terra and the extremely hawkish statement by Jerome Powell. The ETH/USD pair is trading at 2,035, where it has been in the past few days. This price is about 20% above the lowest level last week.

Ethereum Recovery Stalls

Ethereum price has been in a strong bearish trend in the past few months. It has declined by more than 58% from its highest level in November last year.

The main catalyst for the sell-off has been the sudden change of tone by the Federal Reserve. After spending most of 2021 talking about transitory inflation, the Fed has changed its tone. It has already hiked interest rates by 0.75% in the past two meetings.

The bank has also signaled that the hawkish tone will continue. In a statement at a summit by the Wall Street Journal, Jerome Powell repeated his previous statement that fighting inflation will cause some pain in the market. Analysts now expect that the bank will hike interest rates by 0.50% in the next meetings and then switch to 0.25% hikes for the rest of the year.

As such, these are unprecedented times for both cryptocurrencies and other financial assets like stocks. That’s because the Fed has not been this hawkish in years.

The collapse of Terra has also had an impact on the recent performance of Ethereum price. Many investors have pulled out their resources from many DeFi platforms built using Ethereum’s platform after realizing that they could lose everything. According to DeFi Llama, the total value locked in Ethereum’s network has dropped by more than 38% in the past 30 days. It stands at $71 billion.

Ethereum Price Prediction

Turning to the daily chart, the ETH/USD pair made a strong bearish trend in the past few days. The sell-off accelerated when the coin managed to move below the support at 2,162, which was the lowest level on January 24th. After falling sharply last week, the coin has formed a break and retest pattern, which is usually a sign of continuation. It has moved below the 25-day moving average.

Therefore, there is a likelihood that Ethereum will continue falling as bears attempt to retest last week’s low of $1,705. A move above the resistance at $2,170 will invalidate the bearish view.

A break below the support at 1.0388 will signal that bears have prevailed.

Bearish View

• Set a sell-stop at 1.0390 and a take-profit at 1.0300.
• Add a stop-loss at 1.0500.
• Timeline: 1-2 days.

Bullish View

• Set a buy-stop at 1.0471 and a take-profit at 1.0550.
• Add a stop-loss at 1.0380.

The EUR/USD pair declined slightly as concerns about the future of the European economy continued. The euro is trading at 1.0420, which is a few pips above its lowest level since 2002. There are also talk that the pair will fall to parity level in the coming weeks.

Euro Weakness Continues

There are several concerns about the Euro area economy as investors pay a close attention to a number of key events.

First, Finland and Sweden have announced their intention to join Nato, a move that has already infuriated Vladimir Putin. As such, there are concerns that Putin will invade the two countries in future and even cut them from vital natural resources. In a statement on Monday, he warned against placing military equipment close to its border.

Second, there are lingering inflation costs in the European economy as gas prices remain at an elevated level. On a positive side, gas prices in the region declined on Monday as the European Union decided to give waivers for companies to continue buying gas from the country.

Further, recent economic data fromthe Euro area have been significantly weak. Retail sales have declined sharply while industrial production has lagged that of other regions.

The key catalyst for the EUR/USD pair will be the upcoming speech by Christine Lagarde. The ECB president will likely provide hints about the bank’s next moves. Analysts are pricing in a rate hike in the July meeting.

Another big data will be the US retail sales. With consumer confidence falling, and with inflation at the highest level in more than 40 years, there is a likelihood that retail sales dropped in April. The consensus view is that the headline sales rose by 0.9% in April while core sales rose by 0.5% on a month-on-month basis.

EUR/USD Forecast

The EUR/USD pair has been ranging in the past few days as concerns bout the Euro area economy continues. On the 4H chart, the pair has formed a bearish flag pattern that is shown in black. It is also slightly below the important resistance level at 1.0472, which was the lowest level on April 28th.

The EURUSD pair’s downward trend has also been supported by the 25-day moving average. Therefore, a break below the support at 1.0388 will signal that bears have prevailed. As a result, it will see the pair drop to the key support level at 1.0300.