EUR/USD hit an eight-session low on Tuesday before turning positive and generating short-term bullish signals, but risks ranging from slowing global growth to ECB policy and the Ukraine war remain longer-term risks that could send it toward 0.9000.
The IMF cut its 2023 global growth forecast to 2.7% from 2.9% and its Chief Economist Pierre-Olivier Gourinchas said the worst is yet to come.
The IMF cut 2023 euro zone growth to 0.5% and China's, which Europe is highly dependent on, down to 4.4% from 4.6% nL1N31B1FI.
ECB Chief Economist Philip Lane said further progress in lowering inflation can be attained by ensuring the appropriate level of slack in the economy nL8N31C3ZK.
Meanwhile, NATO Secretary-General Jens Stoltenberg warned that any deliberate attack on allied infrastructure would be met with a united and determined response nS8N2SV0DE.
Those downside risks combine with longer-term technicals highlighting bearish potential.
Monthly RSI is oversold but is falling and not diverging, which implies downside momentum remains and October's monthly inverted hammer candle implies bears remain in charge.
A break of key support near 0.9500 should lead to a test of the 0.9000 area.
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