Euro Holds Ground for Now but Risks Swirl on Biden NATO Visit. Will EUR/USD Resume Lower?
EURO, EUR/USD, CRUDE OIL, US DOLLAR, RUSSIA, PUTIN, BIDEN – TALKING POINTS
- Euro threatened by energy supply risks heightened ahead of a series of summits
- APAC equities, commodities and related currencies soften slightly in a quiet day
- All eyes on commentary around the Ukraine war.Will EUR/USD breakdown?
Euro Holds Ground: The Euro has continued to consolidate ahead of a series of meetings in the next 2 days.
US President Joe Biden has a busy day ahead with meetings at the NATO summit, EU Leaders summit and the G-7. Tomorrow he is expected to meet with the Polish President Andrzej Duda.
There could be significant “announcement risk” for markets in the coming sessions.
Currencies had a fairly quiet day in the Asian session with the US Dollar and the Japanese Yen the largest gainers. The commodity currencies of AUD, CAD and NZD gave up some ground.
Markets continue to re-align in the aftermath of a more hawkish Fed this week. The US session saw bond markets recover somewhat with yields going lower, while equities took a hit. In Asia today, bonds eased off and futures are pointing to a small uptick to start Wall Street
APAC equities were slightly down to varying degrees across the region, with the exception of Australia’s ASX 200. Commodity markets continue to underpin that index.
Euro Holds Ground
Japanese PMI came out stronger than expected. The manufacturing index printed at 53.2, rather 52.7 anticipated.
Crude oil softened slightly today, after an overnight surge higher on news of more potential sanctions on Russia. It’s being reported that a port in the Black Sea that processes 1 million barrels per day has been forced to close.
Russian President Vladimir Putin has said that natural gas exports to Europe must now be paid in Rubles. It remains to be seen if countries will comply with the demand
The Brent crude oil futures contract is trading near US$ 121 bbl and the WTI contract is close to US$ 114 bbl. Gold is steady near US$ 1,939
After a series of European numbers, the US will see jobless claims and durable goods orders data.
The full economic calendar can be viewed here.
EUR/USD TECHNICAL ANALYSIS
EUR/USD has dipped below the 10-day simple moving average (SMA) as it remains in a short-term range.
Further losses may signal bearish momentum regaining ascendency, as the price remains below all other period SMAs.
Support could be at the previous lows of 1.08910 and 1.08062. While on the topside, resistance might be offered recent highs of 1.11212 and 1.11375.
