Agressive hiking from FED managed to break the euro. FED - ECB battle seem to have been lost by the EUR party. Bearish evening star off 1.05 predicts further drop (the lack of major reaction at 1.05 is disturbing for euro pointing to 1.0 (possibly 1.025) as the next key support. Yet in May this year Reuters reported on the possible EURO crash in response to the inflation and economic woes:
"The record-high EU inflation and the bleak outlook for economic growth may still weigh on the euro’s performance in the coming months.
Growing pessimism has already resulted in a significant depreciation of the single currency (-16% in the past year), and it is hard to identify catalysts that could reverse the euro’s course.
Despite the ECB starting its hiking cycle later, it is not entirely clear that it can raise rates faster or for longer than the Fed. This means the euro may continue to struggle against the dollar. The possibility of a further devaluation is real – in a scenario where the euro falls well below parity if energy and inflationary problems persist over the winter."
Read - www.reuters.com/plus...ld-the-euro-collapse
"The record-high EU inflation and the bleak outlook for economic growth may still weigh on the euro’s performance in the coming months.
Growing pessimism has already resulted in a significant depreciation of the single currency (-16% in the past year), and it is hard to identify catalysts that could reverse the euro’s course.
Despite the ECB starting its hiking cycle later, it is not entirely clear that it can raise rates faster or for longer than the Fed. This means the euro may continue to struggle against the dollar. The possibility of a further devaluation is real – in a scenario where the euro falls well below parity if energy and inflationary problems persist over the winter."
Read - www.reuters.com/plus...ld-the-euro-collapse