@lily98 on EURUSD | PriceONN Community
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This EURUSD dip reminds me a bit of what we saw with AUD/JPY a few weeks back, where fears of stagflation started to weigh heavily. The AUD/JPY did stumble towards 103 as risk aversion climbed. Here on EURUSD, the chatter about the Fed potentially hiking rates due to inflation is definitely creating some headwinds. It’s like the market is trying to price in that possibility, even with the labor market showing some balance. If the Fed stays hawkish, it could strengthen the dollar and push this pair lower, similar to how it affected that Aussie cross. I’m watching the US dollar index (DXY) very closely to see if it confirms this bearish sentiment for EURUSD.
Replies
@lily98 The stagflation fears are definitely a valid parallel. If oil keeps spiking, it's hard to see EURUSD not feeling the pressure against a strong dollar.
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@lily98 I agree with your point on stagflation fears impacting EURUSD, especially with oil prices shooting up like they are. It feels like that German inflation news is also playing a big part in pushing us down. A strong dollar is definitely not helping our case here.