EUR/USD pressured near 1.0250

The EUR/USD pair has maintained the corrective downside well for another trading session and threatens to challenge the key support around the 1.0200 sooner rather than later.

With the opening bell of an uneventful session, the US dollar extends the recent comeback by the recent hawkish messages by Fed policymakers. Statements by Fed speakers renewed oxygen for both the dollar and Treasury yields, and at the same time lessened the optimism around a potential Fed’s lower pace tightening.

In the Eurozone, the increasing speculation of a potential recession in the region – which looks propped up by dwindling sentiment gauges as well as an incipient slowdown in some fundamentals – emerges as an important domestic headwind facing the euro in the short-term horizon.

Key events in the euro area this week: Flash EMU Consumer Confidence (Tuesday) EMU, Germany Advanced PMIs (Wednesday) – Germany IFO Business Climate, ECB Accounts (Thursday) – Germany Final Q3 GDP Growth Rate, GfK Consumer Confidence (Friday).

The Continuation of the ECB hiking cycle versus increasing recession risks, as well as the impact of the war in Ukraine and the persistent energy crisis on the region’s growth prospects and inflation outlook in addition to other inflation-linked risks are all factors that influence the Euro’s performance in the near future.