Euro faces fresh yearly low

The Euro (EUR) accelerates its losses against the US Dollar (USD), dragging EUR/USD to the area of new year-to-date lows around 1.0460 on Tuesday.

In the meantime, the march north in the Greenback remains everything but abated for yet another session, navigating past the 107.00 hurdle when measured by the USD Index (DXY) for the first time since late November 2022. The index has entered its 12th consecutive week of gains.

The monetary policy outlook remains unchanged, as investors maintain their expectation of a 25 basis points (bps) interest rate hike by the Federal Reserve (Fed) before the year concludes. Simultaneously, market discussions persist regarding a potential halt in policy adjustments at the European Central Bank (ECB), despite inflation levels surpassing the bank's target and growing concerns about a potential recession or even stagflation in the region.

The lack of data releases in the domestic docket leaves attention to the publication of the JOLTS Job Openings for the month of August and the IBD/TIPP Economic Optimism index.

From a technical point of view the EUR/USD faces increasing selling pressure and prints new lows for the year in the 1.0460-1.0455 band on Tuesday. On the downside, the continuation of the downward should prompt EUR/USD to meet the next support at the round level of 1.0300 prior to minor support at the November 30, 2022, lows of 1.0290 and 1.0222 from November 21, 2022.

In case of occasional bullish attempts, the pair should encounter a minor hurdle at 1.0617 (high September 29) prior to the September 12 high of 1.0767, before reaching the crucial 200-day Simple Moving Average (SMA) at 1.0825. If the pair breaks beyond this level, it may set up a challenge of the August 30 top at 1.0945 and the psychological barrier of 1.1000. The surpass of the latter might prompt the pair to test the August 10 peak of 1.1064 ahead of the July 27 high of 1.1149 and the 2023 top of 1.1275 seen on July 18.