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Euro at Risk on Italian Election

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EUR/USD recently rebounded after reaching a 20-year low and may soon retest a descending resistance channel dating back to March. The pair repeatedly attempted to breach the slope of depreciation, before ultimately capitulating and continuing its descent. Selling pressure appears to be exhausted, but the temporary respite may be just that: temporary.

EUR/USD - Daily Chart

Euro at Risk on Italian Election. Will Russia Cut off Nord Stream 1?

EUR/USD chart created using TradingView

The macroeconomic circumstances still point to a gloomy outlook for EUR/USD. The recent recovery may be more a function of traders exiting their short positions as risk premiums become skimpier and the threat of a reversal increases. Looking ahead, even if the pair shatter March resistance, the road recovery will be long and arduous.


Jul 26, 2022 | DailyFX
Dimitri Zabelin, Analyst

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