After printing a new multi-year low (1.1059) yesterday afternoon the Euro reclaimed the 1.1100 mark against the Dollar amid a relief-rally of risk markets into the daily close. At time of writing the currency pair is trading again below that level but I still think that a new driver is needed for the next leg lower. Players in the currency market recently bought a lot of downside protection what keeps the pair supported above the big psychological 1.1000 treshold by tactical buying and delta hedging (see Market update #4).
The Dollar-Index touched a very important interim high during the Euro dip yesterday. At this level the Dollar rally could find an end or we will see the next leg higher. That corresponds with a break of the 1.10 mark of course. An escalation of the Russia-Ukraine conflict (if that is possible?) could be the decisive driver, or a big hawkish surprise at the next FED meeting (16mar, see Central Bank Calender 2022).
(weekly Chart)
(source: fxstreet.com)
Above 1.1050/00 it makes sense to buy Euros for a tactical long. But movements below 1.1000 can accelerate extremely and there is no real support until 1.0778/1.0636 (highest and lowest monthly lows in 2020).
(monthly Chart)
Good luck,
Sebbo