EUR/USD is on track to test the July 14 cycle low near 0.9950. Below here, the pair could sink as low as the September 2002 low near 0.9615, economists at BBH report.

The Bundesbank offered a worrisome outlook

“The single currency traded below parity today to the lowest level since July 14 and is on track to test that day’s low near 0.9950. After that, the next target is the September 2002 low near 0.9615.”

“The Bundesbank noted that continued normalization of ECB policy is appropriate since inflation risks skewed to the upside.  Lastly, the bank warned that the odds of economic contraction this winter have risen significantly due to the outlook for natural gas.”