The G20 summit took place in Bali, Indonesia, on November 2022…
EUR/GBP: three-months top
Information is not investment advice
Does the pair still have the potential to the upside?
The British pound has been the worst performing major currency amid the coronavirus pandemic. The main reason is that investors have started to increasingly correlate it with risk. That’s why, fears of the second virus wave pushed it down. The global amount of coronavirus cases has exceeded 10 million this weekend. Investors are concerning about the potential virus resurgence in Leicester.
Moreover, Brexit negotiations weigh additional pressure on the pound. The overall situation over the Brexit deal is uncertain as it hasn’t been any breakthrough yet in the EU-UK talks. The British economic recovery is slower in comparison with European countries. Also, the Bank of England cut the quantitative program too early, that had a negative impact on the GBP. However, the central bank pledged to increase it, if needed. So, it’s just a matter of time.
Unlike the GBP, the euro is more attractive for investors. It has even outperformed the US dollar. The Eurozone has the best coronavirus outlook. Since the whole market sentiment is driven by the COVID-19 developments, EUR has gained. Moreover, investors are optimistic about the European Central Bank recovery fund. If the German chancellor Angela Merkel and the French president Emmanuel Macron make a progress in this deal, EUR may rise. We’ll know on July 17-18 at the EU summit.
The EUR/USD is approaching the 61.8% Fibonacci retracement level at 0.9200. If it breaks it through, it will surge further to the next resistance at 0.9340. Support levels are at 50% and 38.2% Fibo levels – at 0.9100 and 0.9000, relatively. Some analysts consider that it’s overbought, but others still have bullish prospects.
The deafening news shocked the whole world yesterday: the British Queen Elizabeth II died peacefully at the age of 96…
After months of pressure from the White House, Saudi Arabia relented and agreed with other OPEC+ members to increase production.
The first FOMC meeting comes after a buildup of anticipation from traders and investors alike, as the markets await what posture the Fed will take regarding the interest rates; would there be a hike or a cut in interest rates? Recall that the Federal Open Market Committee had previously ended the year 2022 with a 50bps hike, and an indication from Powell, the committee chairman, that the Fed could consider raising interest rates by 75bps in the course of the year 2023.
Western countries are trying to find other options for oil and gas supplies after a 10th package of sanctions, which will put more pressure on Russian oil and decrease global oil supply. Italy, for example, is in talks with Libya.
Last year was tough for the Japanese yen. USDJPY gained more than 30% over 2022, striking above 150 in October. While anticipation of slower Fed rate hikes pulled the pair below the 130 level at the start of 2023, the speculations over the destiny of BOJ’s yield control policy grabbed the attention of the Japanese assets in the middle of January. What lies ahead for traders of the Japanese yen?