EUR/USD could return to parity in the short term
From a technical analysis perspective, EUR/USD is pulling back this morning after swinging up and down to a three-month high at around $1.0350 last week. The euro could retrace some of its gains from the beginning of the month and return to the short-term parity threshold before possibly bouncing higher or resuming its underlying downtrend.
The long-term trend of EUR/USD will mainly depend on the next inflation figures on both sides of the Atlantic. If US inflation continues to be more persistent than expected, this would increase the chances of even more aggressive Fed tightening, which would put further pressure on EUR/USD and vice versa.
In the short term, the next catalysts for EUR/USD will be the numerous interventions by central bankers throughout the week and the flash PMI for November on Wednesday.
Entry: Sell below $1.0300
Risk/return ratio: >2
Follow the evolution of the EUR/USD price with IG.