The single currency has fallen under 1.0590, below pandemic lows and at its lowest level since April 2017. The 1.0600 area for EURUSD has repeatedly worked as a turning point since 2015. In 1997 and 1998 the selloffs also stopped at this level. And in late 1999, a move below 1.06 after a prolonged consolidation was the start of a 20 failure in the pair.

Thus, the EURUSD has reached one of its most important historical milestones, even more important than the eurodollar parity.

And there are now increasing signs that the next steps for EURUSD will be more of a repeat of 1999 than 2017 or 2020.

On the monthly charts, the EURUSD is consolidating below the ultralong term uptrend line dating back to 1971, including passing near the lows of 20002002, 2016 and 2020. We could see a furious selloff in the single currency without a sharp rebound in the pair over the next couple of weeks.

On the sellers side, there is a sharply slipping economic mood. A new survey by Germanys GfK noted the worst consumer sentiment in history, even worse than at the lowest point of the pandemic.

Consumers are reducing their income expectations and sharply increasing their propensity to save. This consumer sentiment works against economic recovery as it reduces consumer spending and hence corporate and government revenues.

Potentially for the debtburdened Eurozone, this is a bad sign because the currencys weakness leads to higher bond yields and makes debt service even more expensive. This is…