A few weeks back, EUR/USD hit 1.0, and it has been floating around that spot ever since. With a combined growth in the US and a decline in the EU, the two currencies were more or less equalized and still are. However, it seems like the euro still has a bit of latent power within it, and it’s starting to push through.
The euro started its advance on Friday and has been building momentum ever since. Determined to break some resistance points, it has grown to 1.02. As such, it’s tested out a new peak that may be sustainable for the following period.
However, economists are still drawing attention to the fact that the euro is not in the clear. Europe’s economic troubles are far from over, as the struggle to become independent from Russian gas continues. Many countries within the EU are suffering from housing crises and rising costs of living.
Furthermore, although the EU did find a gas alternative in Norway, the situation isn’t great. The supply is lower than the demand, causing prices to skyrocket to the point where governments can’t foot the cost. As such, citizens will likely see major power price increases, which are especially unwelcome during times of high inflation.
One solution within the EU is to make a price cap deal; however, that seems equally unlikely. Norway itself advised against planning any such steps and doesn’t seem to be willing to budge too much on the issue.
And forex analysts also emphasize that, while the euro is out of one resistance field, it just stumbled into the next. Any sort of sustained growth is highly questionable, especially with the current prevalent economic troubles.
Forex traders may want to look elsewhere for gains as EUR/USD is likely to fluctuate in a narrow price range.