Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

USD/EUR: Is This The Dollar’s Last Hurrah?

By Michele SchneiderForexJul 14, 2022 12:17AM ET
USD/EUR: Is This The Dollar’s Last Hurrah?
By Michele Schneider   |  Jul 14, 2022 12:17AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

EURUSD-Monthly Chart
EURUSD-Monthly Chart

US Dollar and Euro at Parity Again

Investors are flocking to the dollar as Europe braces for a potential energy crisis in the Fall. The euro has been under pressure recently, with investors pulling their money out in favor of the haven currency—the US dollar.

This is the first time the dollar and euro are at parity since 2002.

Can it last?

The interest rate differential between the US and Europe, bond yields, and global risk-off sentiment have had a major impact on the currency values and currency pair.

The European Union is currently facing many challenges, including an ongoing war near its borders between Russia and Ukraine and a growing risk of recession as well. The euro has been steadily declining over recent months and was finally pushed down to one US Dollar this week.

The Federal Reserve's plan to continue to hike aggressively has caused the US dollar to rise against most major foreign currencies like euros and Japanese yen. Yet, investors often sell dollars when the U.S. economy goes into a downturn.

Is the U.S. dollar reaching its peak?

The global economy is in a downward spiral, with central banks around the world doing everything they can to tighten monetarily and maintain price stability. The United States has committed to bringing down inflation through higher interest rates.

Although one can see why the Federal Reserve would seek to take this tact, it also creates a greater risk for recession. If recession fears cause the dollar to peak, then we are back to looking at higher inflation if the dollar weakens.

UUP-Daily Chart
UUP-Daily Chart

The Charts

The dollar as seen through the ETF UUP illustrates the potential for a peak in value.

First, our Real Motion indicator shows a mean reversion (when the red dots fail the dotted Bollinger band).

Secondly, the price is also failing the solid line Bollinger band, another indication of a mean reversion setup.

If you are a candlestick fan, then notice that the body of the most recent candle (July 13th) after the CPI report, also shows a bearish engulfing pattern (body of candle is bigger than the bodies of the last 2 candles.)

Put that all together and we should know very soon whether the dollar takes a rest and leaves the door open to higher commodity prices regardless of the Fed’s best intentions to curb inflation.

ETF Summary

  • SPDR® S&P 500 (NYSE:SPY) 372-386 new trading range to watch
  • iShares Russell 2000 ETF (NYSE:IWM) 170 support must hold
  • SPDR® Dow Jones Industrial Average ETF Trust (NYSE:DIA) 307 support and needs to clear 315
  • Invesco QQQ Trust (NASDAQ:QQQ) Looking heavy unless it clears 297 and 277 key support
  • SPDR® S&P Regional Banking ETF (NYSE:KRE) 56 the 200 WMA 60 resistance
  • VanEck Semiconductor ETF (NASDAQ:SMH) 200 now interim support 210 resistance
  • iShares Transportation Average ETF (NYSE:IYT) What was hopeful now not looking good, under 112 or the 200-WMA
  • iShares Biotechnology ETF (NASDAQ:IBB) 129.50 resistance 117 support
  • SPDR® S&P Retail ETF (NYSE:XRT) 60.75 the 200-WMA 57.50 support
USD/EUR: Is This The Dollar’s Last Hurrah?

Related Articles

Al Brooks
EUR/USD: Profit Taking At 2017 Low By Al Brooks - Aug 15, 2022

The EUR/USD is testing the middle of the July tight trading range following a selloff of the 2017 low. This is profit taking from 2017 low, and the pullback is deeper than the...

USD/EUR: Is This The Dollar’s Last Hurrah?

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email