+560 pips to -1.618 Extension as Forecasted
At the end of September, the euro was worth $0.97, which was its worst level since June 2002. This was because investors were worried about a recession and digesting the results of Italy's election. According to economic data released on Friday, business activity in the Eurozone dropped for the third month in a row in September and is likely to drop even more in the months to come. At the same time, European Central Bank officials said they would keep fighting for higher interest rates this year and next to fight inflation, even though the economy in the region is slowing down.
On the political front, Italy chose on Sunday its most conservative leader since World War II.
FORECAST
The EUR/USD is likely to trade at 0.96 by the end of this quarter, according to our' global macro models and expert predictions. We think it will be worth $0.92 in the next 12 months.
The DXY
As investors took some gains and took a breather after a rapid surge, the dollar index dropped below 114 on Tuesday, retreating slightly from a record 20-year high of 114.5 hit in the previous session. This comes after the index reached a fresh high of 114.5 in the previous session. As a result of market participants' expectations that the Federal Reserve would continue to tighten monetary policy in order to combat rising inflation, the value of the US dollar has remained around its all-time highs in comparison to its major trading partners. On Monday, a number of Federal Reserve officials expressed their determination to continue the battle against inflation, even if doing so would cause some economic suffering and increased market instability. The dollar continued to be supported by demand for safe havens as investors rushed for its protection in the face of a very uncertain outlook for the global economy and rising prospects of a recession. Because investors didn't trust the UK's economic policies, the value of the US dollar stayed close to multi-decade highs when compared to the euro and the yen, but it stayed close to an all-time low when compared to the British pound.
On the political front, Italy chose on Sunday its most conservative leader since World War II.
FORECAST
The EUR/USD is likely to trade at 0.96 by the end of this quarter, according to our' global macro models and expert predictions. We think it will be worth $0.92 in the next 12 months.
The DXY
As investors took some gains and took a breather after a rapid surge, the dollar index dropped below 114 on Tuesday, retreating slightly from a record 20-year high of 114.5 hit in the previous session. This comes after the index reached a fresh high of 114.5 in the previous session. As a result of market participants' expectations that the Federal Reserve would continue to tighten monetary policy in order to combat rising inflation, the value of the US dollar has remained around its all-time highs in comparison to its major trading partners. On Monday, a number of Federal Reserve officials expressed their determination to continue the battle against inflation, even if doing so would cause some economic suffering and increased market instability. The dollar continued to be supported by demand for safe havens as investors rushed for its protection in the face of a very uncertain outlook for the global economy and rising prospects of a recession. Because investors didn't trust the UK's economic policies, the value of the US dollar stayed close to multi-decade highs when compared to the euro and the yen, but it stayed close to an all-time low when compared to the British pound.
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