The G20 summit took place in Bali, Indonesia, on November 2022…
Euro keeps rallying for the fifth day
Information is not investment advice
EUR/USD is edging higher amid the broad sell-off of the greenback and the overall risk-on sentiment. Let’s discuss what can stop its rally.
The euro rally has started with the ECB’s statement last week, when the central bank addressed a stronger euro. Today China released upbeat economic indicators: industrial production, retail sales, fixed asset investment, and unemployment rate. All the data were better than analysts expected. Moreover, coronavirus hopes added optimism to the market as well. As a result, the market sentiment improved, which underpinned risker assets and weighed on the safe-haven US dollar.
New virus cases are rising in some parts of Europe, but investors shrug off that news for now. Besides, there is some uncertainty over Brexit as the UK Prime Minister Boris Johnson passed the Internal Market Bill, which violates the previous EU-UK agreement. The worsened relationship between both sides may lead to hard Brexit, which would negatively impact the Eurozone as well as the United Kingdom.
EUR/USD is trading above 50-, 100- and 200-day moving averages, signaling the bullish momentum. The RSI indicator is at quite high levels, but still below 70, which indicates that the euro is not yet overbought. There is a significant resistance of 1.1940, which the pair has failed to break several times. If it manages to cross it, the way towards the key psychological mark of 1.2000 will be open. Support levels are at the lows of September 8 and August 28 at 1.1770 and 1.1700, respectively.
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?