EUR/USD contained above 0.9680, remains moving sideways around 0.9700

• The euro fails to bounce up, althoiugh it remains steadu above 0.9680.
• A sour market mood underpins USD strength and weighs on the euro.
• EUR/USD to continue its downtrend towards 0.9650/00 – Scotiabank.

Euro’s reversal from intra-day high right below 0.9740 has been contained at 0.9690, and the pair remains moving without directions within a tight range around 0.9700.

US dollar appreciates on a risk-off market

In absence of first-tier macroeconomic events, the sour market mood reflected on the negative stock indexes has been weighing on the pair’s bullish attempts, with the USD underpinned by its safe-haven status. The common currency is ticking up on the daily chart, in an attempt to put an end to a four-day decline.

Investors seem to be wary about the prospects of a global economic downturn, with the Ukrainian war escalating and energy prices at high levels an scenario that, combined with the effects of the monetary tightening cycle of most of the major central banks has boosted risk aversion among traders.

Furthermore, news about rising COVID-19 infections in some of China’s main cities, which have forced some local authorities to close schools and tourist attractions, have increased concerns about global economy.

EUR/USD, aiming to 0.9600/50 area ­– Scotiabank

Currency analysts at Scotiabank expect the pair to extend its downtrend to. The lower range of 0.9600: “Sequentially lower lows and lower highs keep the 2022 downtrend in the EUR very much intact on the daily chart – even with the selloff looking overextended (…) Intraday patterns look soft; the USD is pressuring EUR support in the low 0.97s, leaving the market on the cusp of a push back to the 0.9600/50 range.”

Technical levels to watch