Is Eurusd Headed To Parity

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Is Eurusd Headed To Parity

Is Eur/Usd Headed To Parity?

EUR/USD made a strong comeback, similar to what we saw in all the other risk assets. This comes at a time when the EUR/USD plunged to multi-year lows near 1.02.

This decline has also raised a question: Is the EUR/USD headed to parity or the 1.02 low will remain relevant. For now, the EUR/USD appears to be recovering a little bit & is seen near 1.0277.

However, the recovery still doesn't negate the long-term downtrend in the EUR/USD. For prespective, the EUR/USD is on path to end its 4 month in red.

key driver of the bearish momentum in the Euro is the surging USD. But, what's driving the USD Strength? It's the expectation that inflation will remain high under Trump. When we combine with weak data from China and the Eurozone, the reasons become clear.

For now, the greenback is having a field day and is receiving support from robust data & high bond yields. The NFP data was also very strong and showed that the labor market is doing exceptionally well.

Less chances of a rate cut, along with the rise in the bond yields, have proven to be the ideal catalyst for boosting the DXY. That's why the DXY is now sitting at highs with 4 weeks of gains.

In the short-term, the EUR/USD is at risk of more down and is highly likely to reach parity. In fact, the EUR/USD could even drop below the 1.000 (parity) during Q1 2025.

For that to happen, the US yields will have to maintain the current bullish momentum. The nearest support is found at 1.0200, followed by the next one at 1.0100.

As for the resistance, the first one is at 1.0300, followed by the next one at 1.0400. But based on the fundamental and technical data, the path of least resistance for EUR/USD is the downside.

If the current momentum continues, the next stop for the EUR/USD will be 1.000 or even below that!

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