The euro fell against the US dollar for a third day on Thursday, reaching about 1.1680, its lowest level since 13 April. Market mood weakened as the US-Iran peace process stalled, while eurozone business activity data came in weaker overall.<\/p>\n
In the eurozone, the preliminary HCOB PMI showed manufacturing rising to 52.2 from 51.6 in March, beating the 50.8 forecast and marking its highest level in nearly four years. Services fell to 47.4 from 50.2, below the 49.8 forecast, pulling the composite index down to 48.6 from 50.7 versus a 50.2 expectation.<\/p>\n
Oil prices rose as the Strait of Hormuz remained closed, adding pressure to crude-importing eurozone economies. Iran seized two ships on Wednesday, and the US military redirected three Iranian tankers in Asian waters.<\/p>\n
Attention later turns to US weekly Jobless Claims, expected to show a moderate rise, ahead of the preliminary US S&P Global PMI for April. Technically, EUR\/USD broke a late-March uptrend, with RSI nearing oversold and the MACD histogram showing widening red bars.<\/p>\n
Support sits near 1.1680, then 1.1643, with further support at 1.1505\u20131.1525. Resistance is near 1.1720, then around 1.1765.<\/p>\n
Given the combination of geopolitical risk and weakening Eurozone data, we should anticipate further downside in the EUR\/USD. Buying put options with strike prices near the 1.1643 and 1.1525 support levels would be a direct way to position for this move. This strategy allows us to capitalize on the negative momentum while clearly defining our maximum risk.<\/p>\n
The pressure from rising oil prices due to the Strait of Hormuz closure cannot be underestimated. We saw this playbook back in 2022 when the energy shock following the conflict in Ukraine sent Eurozone inflation to a peak of 10.6%. That historical event shows how vulnerable the Euro is to energy crises, supporting a bearish outlook as long as tensions with Iran remain high.<\/p>\n
The divergence between a surprisingly strong Eurozone manufacturing PMI and a contracting services sector points to an uneven and fragile economy. This reminds us of the dynamic in 2023, when the US economy grew a robust 2.5% while the Euro area stagnated at just 0.5% growth. This fundamental economic gap reinforces strategies that favor the US dollar over the euro.<\/p>\n
Technically, the break of the upward trendline is a significant bearish signal. With the Relative Strength Index (RSI) approaching oversold territory but not yet there, the pair has more room to fall. We should remember how quickly the EUR\/USD broke below parity in 2022 once key supports failed, indicating that this downward momentum could accelerate.<\/p>\n
The high level of uncertainty means that implied volatility in the options market is likely rising. This makes selling out-of-the-money call spreads an attractive strategy for us to consider. By doing so, we collect premium based on the view that the pair will not be able to reclaim the 1.1765 resistance level in the coming weeks.<\/p>\n","protected":false},"excerpt":{"rendered":"
Euro hits 1.1680 as weak eurozone PMIs and Iran tensions boost dollar; support 1.1643, resistance 1.1720.<\/p>\n","protected":false},"author":38,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[46],"tags":[],"class_list":["post-45711","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":[],"aioseo_notices":[],"featured_image_src":null,"featured_image_src_square":null,"author_info":{"display_name":"josephine","author_link":"https:\/\/www.vtmarketsglobal.com\/en\/author\/josephine\/"},"_links":{"self":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/45711","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/users\/38"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/comments?post=45711"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/45711\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/media?parent=45711"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/categories?post=45711"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/tags?post=45711"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}