EUR/USD may 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 around $1.0350 last week. The euro could regain some of its gains from the beginning of the month and return to the short-term parity threshold before possibly jumping higher or resuming its underlying downtrend.
The long-term trend in EUR/USD will mainly depend on the next inflation numbers on both sides of the Atlantic. If US inflation continues to be more persistent than expected, it will increase the chances of even more aggressive Fed tightening, putting further pressure on EUR/USD and vice versa.
In the near term, the next catalysts for EUR/USD will be the numerous central bank interventions during the week and the flash PMI for November on Wednesday.
Entry: Sell below $1.0300
Risk/reward ratio: >2
Follow the development of the EUR/USD price with IG.