EUR/USD around 20 year lows

The EUR/USD is pressured and teasing two-decade low marked earlier in the week. Russia’s Nord Stream gas pipeline leaks, in the Baltic Sea, renewed fears about Europe’s energy crisis, and at the same time raised recession-linked fears.

The EUR/USD pair holds lower grounds around the yearly bottom marked on Monday, despite picking up bids to 0.9600 during Wednesday’s Asian session, as risk-aversion strengthens. Downside pressure on the major currency pair could be due to the fears of more pain in terms of the energy supplies to the old continent, as well as the firmer US data.

The hawkish comments and remarks by ECB policymakers failed to boost the Euro. ECB Vice President Luis de Guindos said on Tuesday that there will be rate hikes over the upcoming months, adding that the number and size of the hikes will be determined by the economic data.

“We are facing an overlapped succession of shocks that have changed the context in a significant way,” ECB’s Mario Centeno said and noted that the interest rate increase cycle will continue.

On the US front, firmer US Durable Goods Orders and CB Consumer Confidence data joined hawkish Fed officials to impress the dollar buyers. US Durable Goods Orders declined by 0.2% in August versus the market forecasts of -0.4% and the revised down prior reading of -0.1%.

The Nondefense Capital Goods Orders ex Aircraft, however, improved by 1.3% during the stated period compared to 0.2% expected and 0.3% previous readouts. Further, US CB Consumer Confidence improved to 108.00 for September versus 104.5 expected and 103.20 prior. Consumer confidence has now improved for two consecutive months, bolstered by fuel prices falling to their lowest level since the beginning of the year.

“It will be appropriate to slow the pace of rate increases and hold rates for a while to assess the impact on the economy,” Chicago Fed President Charles Evans said on Tuesday. St. Louis Federal Reserve Bank President James Bullard said that they have a serious inflation problem in the US. “More rate rises to come in future meetings.” Minneapolis Fed President Neel Kashkari said the central bank is moving “very aggressively,” and there is a high risk of “overdoing it.”

It’s worth noting that the rally in the global bond yields, led by the UK’s, joined negative equities to add strength to the bearish bias for the EUR/USD pair.

Moving on, a lack of major data, catalysts or events could keep the EUR/USD weakness continued amid the prevailing fears for Europe and the market’s rush for risk safety.

However, speeches from ECB President Christine Lagarde and Fed Chair Jerome Powell may entertain the pair buyers if they speak about matters relating to the monetary policy.

Technically; the EUR/USD sellers poke the year 2001 peak surrounding 0.9590 to aim for the support line of a six-month-old bearish channel, at 0.9475.