In the downward trend of the euro against the dollar, the flag-shaped form of the rebound has formed

Sept. 19 - As the dollar continues to strengthen, the euro currency pair is hovering at its lowest level against the U.S. dollar since June of this year. It is trading at 1.0660, well below the July high of 1.1270. The main drivers of the euro-dollar currency pair are the latest U.S. inflation data and the decision of the European Central Bank (ECB). Inflation remained stable in August, the U.S. Bureau of Labor Statistics (BLS) said in a report. The overall CPI jumped to 3.7 percent due to higher gasoline prices.

As the dollar continued to strengthen, the pair was trading at its weakest level against the greenback since June, trading at 1.0660, well below the July high of 1.1270.

The main drivers of the EURUSD currency pair were the latest US inflation data and the decision of the European Central Bank (ECB). The US Bureau of Labor Statistics (BLS) said in a report that inflation remained stable in August. The overall CPI jumped to 3.7% due to higher gasoline prices.

Meanwhile, in Europe, the European Central Bank decided to raise interest rates by 0.25% to 4%, a record high. The bank said in a statement that inflation remained high and further tightening was needed.

Europe faces major challenges, particularly in the energy sector. Like other countries, it has been affected by the rise in crude oil prices. Brent crude, the international standard, rose to $93 last week and analysts believe it will rise to $100.

Gas prices in Europe have also risen again because of strikes in Australia. At the same time, liquidity in the banking sector has fallen to its lowest level in years. As a result, the eurozone is in danger of falling into recession this year. Germany, the European Union's largest economy, has contracted for two consecutive quarters.

After the European Central Bank raised interest rates, the euro fell against the dollar as investors interpreted it as a very pessimistic rate hike.

Looking ahead, there will be several important US and European economic data on Tuesday. The European Union's statistical office will release final inflation data for Europe, while the US will release the latest housing starts.

The main catalyst for the movement of the euro against the dollar will be the impending decision by the Federal Reserve. Some analysts expect the bank to raise interest rates by 0.25%, while others expect a hard stop.

Technical analysis of the trading of the EUR/USD currency pair

The euro has been in a strong downward trend against the dollar over the past few months. The pair has formed a downward channel. The pair has also formed a downward flag pattern, which is a worrying signal for bullish euro traders. It has also fallen below the 50-cycle moving average, while the MACD has fallen below the neutral point. It has also formed a head and shoulders pattern.

Therefore, the pair may see a downside breakout, and the next level to watch is 1.0600. On the upside, the next level to watch is the top of the downtrend channel.

At 14:50 Beijing time, the euro was trading at 1.0680/82 against the dollar.