Yesterday’s strong market sell-off is sounding a warning bell.
The euro fell to a record low against the U.S. dollar and could reach parity in the near future. As for the euro area, there is not much to be positive about. Investors are dealing with the prospects of an energy crisis that risks sending the region into a recession. If the Nord Stream 1 gas pipeline from Russia is shut off, there could be much more pain for the euro. Parity could thus be only an intermediate target amid the euro’s decline.
EUR/USD: A next lower target is 1.0170. The former support around 1.0350 could now act as a resistance.
The British pound dropped below 1.20 and tested even the 1.19-level on the back of political instability. Two members from U.K. Prime minister Boris Johnson’s cabinet announced their resignations, adding to political uncertainty.
GBP/USD: If 1.19 breaks we see a next lower target at 1.18. A short-term resistance comes in at around 1.2150.
Our trading ideas for today 6/7/22:
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Long @ 1.0275
Short @ 1.0230
Long @ 1.1940
Short @ 1.1890
Long @ 12530
Short @ 12440
Disclaimer: All trading ideas and expressions of opinion made in the articles are the personal opinion and assumption of MaiMarFX traders. They are not meant to be a solicitation or recommendation to buy or sell a specific financial instrument.
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