EUR/USD contained above 0.9680, and still moving sideways around 0.9700

• The euro fails to bounce, although it remains firm above 0.9680.
• The mood of the markets underpins the strength of the dollar and weighs on the euro.
• EUR/USD will continue its downward trend towards 0.9650/00 – Scotiabank.

The reversal of EUR from the intraday high just below 0.9740 it has been contained at 0.9690, and the pair continues to trade aimlessly within a tight range around 0.9700.

The dollar appreciates due to risk aversion

In the absence of major macroeconomic events, the sour mood in the markets, reflected in negative stock indices, weighed on the pair’s upward attempts, with the dollar underpinned by its safe-haven status. The EUR advances on the daily chart, in an attempt to end a four-day decline.

Investors seem wary of the prospects of a global economic recession, with the escalation of the war in Ukraine and high energy prices, a scenario that, combined with the effects of the monetary tightening cycle of most banks power plants, has fueled risk aversion among operators.

In addition, news of rising COVID-19 infections in some of China’s major cities, forcing some local authorities to close schools and tourist attractions, has raised concerns about the global economy.

EUR/USD targeting 0.9600/50 zone — Scotiabank

Scotiabank currency analysts expect the pair to extend its downtrend to . 0.9600 Lower Range: “Sequential Lower Lows and Highs Keep the 2022 Euro Downtrend Very Intact in the graphic daily, even with selling looking overextended (…) Intraday patterns look soft; The dollar is pressuring euro support at 0.97 lows, leaving the market on the cusp of a push towards the 0.9600/50 range.”

Technical levels to watch