The pair continues to be marked lower after the technical break of the 1.0800 level. It has been quite the climb down since last year for the euro, as regional growth prospects fade and the lack of real sense of urgency from the ECB. Yes, money markets have done the job to price in more aggressive rate hikes but the same can be said for the Fed - even more so.
The technical aspect is a scary one for the euro as there is little stopping a retest of the March 2020 low around 1.0635. If that gives way, the next key support is seen around 1.0400 with the December 2016 and January 2017 lows seen around 1.0340-60 levels.
The bigger problem for the euro is that there is seemingly a lack of tailwinds at the moment. As mentioned last week, the French election certainly wasn't one and as inflation pressures continue to build, it will weigh on consumption and spending even more heavily in the months ahead.
The only reprieve is that energy prices have cooled since the peak during the Russia-Ukraine conflict but that doesn't really say a lot now, does it?
The growth outlook is looking extremely suspect and the ECB doesn't have the right tools to either deal with inflation or to fix the issues plaguing the economy at the moment.
Policymakers can talk up being more aggressive but at the end of the day, the data will be telling and it won't be of much comfort for the euro if we continue down this path.
