FX.co ★ Euro saw a smooth reversal

EUR/USD

There is a slow but smooth reversal in euro, which has been going on for almost two weeks. The new talks of another 0.75% Fed rate hike as early as mid-December are obviously pushing the currency down.

But even though inflation in the Euro area is at 10% y/y, which forces the ECB to raise the rate or make formidable statements about their willingness to increase it, there is an important factor that distinguishes it from the situation in the US. That is the energy crisis.

In the US, fuel and electricity prices have changed little over the year, while in Europe, both have gone up very much, which is fatalistic.

This means that euro will be under pressure, with highs of recent weeks becoming the upper limit of the range. Be careful when selling, especially from rebounds.