EUR/USD Price Analysis: Range bound within 1.0100-1.0260 since July 22

 

• The EUR/USD is set to finish the week almost flat, gaining 0.05%.
• The shared currency daily chart is neutral-to-downwards, but the hourly is neutral-to-upwards.
• EUR/USD Price Analysis: A daily close above 1.0200 could pave the way towards 1.0300; otherwise, it might drop towards 1.0096.

The EUR/USD is trading at 1.0220, after hitting a daily high at 1.0254, but later tumbled towards the daily low at 1.0145 on elevated US inflation data. In June, the Personal Consumption Expenditures (PCE) rose by 6.8% YoY, fueling expectations of additional Federal Reserve rate hikes, despite the market's pricing in only 80 bps of tightening.

EUR/USD Price Analysis: Technical outlook

From a daily chart perspective, the EUR/USD remains neutral-to-downward biased, helped by the 20-day EMA lying below the exchange rate at 1.0167. Nevertheless, the EUR/USD, unable to capitalize on an upbeat market mood, and broad US dollar weakness, keeps the shared currency exposed to further selling pressure. If EUR/USD buyers want to shift the bias to neutral, they must reclaim the May 13 low-turned-resistance at 1.0348. Once cleared, a challenge of the 50-day EMA at 1.0423 is on the cards. On the other hand, if EUR/USD sellers achieve a daily close below 1.0200, that would pave the road towards 1.0096.

📕 Comment on Gold on April 25, 2022:

 📕 Comment on Gold on April 25, 2022:

 - Ending the last trading week, precious metal Gold closed with a bearish candle with quite strong force around 1931 and in the early morning of today Gold continued to decline to around 1921, the price turned around.  exactly the same as the starting point of the rally 2 weeks ago.

 - Gold is currently in the support zone 1917-1920.  It is likely that Gold will recover slightly here after a fairly strong drop last week and in my opinion it is likely that Gold will recover to around the 1940 level here we need to wait and see a sell signal.  .  If Gold cannot recover and break through the 1917-1920 threshold, the possibility of this precious metal will slide down to 1900-1890.

When is the US monthly jobs report (NFP) and how could it affect EUR/USD?

 

US monthly jobs report overview

Friday's US economic docket highlights the release of the closely-watched US monthly jobs data. The popularly known NFP report is scheduled for release at 12:30 GMT and is expected to show that the economy added 490K new jobs in March, down from the 678K reported in the previous month. The unemployment rate is expected to edge lower to 3.7% from 3.8% in February. Apart from this, investors will take cues from Average Hourly Earnings amid expectations for a more aggressive policy response to contain high inflation. 

As Joseph Trevisani, Senior Analyst at FXStreet, explains: “It is becoming clear that the reconstitution of the labor market is not enough to prevent inflation from crippling the economic recovery. The crucial factor is consumer spending. About two-thirds of US economic activity can be directly traced to personal expenditures. The availability of jobs and the ability of workers to seek higher wages are the main supports for consumer spending.”

Singapore: Industrial Production remains robust – UOB

 Economist at UOB Group Barnabas Gan reviews the latest industrial production figures in Singapore.

Key Takeaways

“Industrial production surged 17.6% y/y (+16.6% m/m sa) in Feb 2022, surprising market expectations for a 6.3% y/y (+5.7% m/m sa) growth. Excluding biomedical manufacturing, industrial production rose 16.8% y/y.”

“The strong performance in Singapore’s manufacturing sector is underpinned by the global trade recovery, especially on the back of healthy semiconductor- and biomedical-related demand. Other factors that have supported Singapore’s manufacturing momentum also include the gradual reopening of international borders, which resulted in higher levels of maintenance, repair and overhaul activity from commercial airlines.”

“In all, our outlook is for full-year manufacturing to grow by an average of 4.0% in 2022. This suggests that despite the high-base growth rate seen in 2021, global trade activity is expected to stay buoyant in the new year.”

AUD/USD to advance back toward 0.75 by year-end – ANZ

 After a tough start to the year, the AUD has rebounded convincingly to become one of the leaders in the G10. Economists at ANZ Bank expect the AUD/USD to move sideways in the near-term before staging a leg higher to the 0.75 level by year-end.

Challenging risk environment will keep rallies capped 

“The terms of trade improvement and a strong domestic economy are likely to keep the AUD well supported, though a challenging risk environment will keep rallies capped.”

“We believe the aussie will be mostly rangebound through the middle part of 2022 before a global growth recovery helps propel a move back to 0.75 by year-end.”

Euro sinks to multi-year lows versus dollar, Swiss franc and sterling

The euro fell to a seven-year low versus the Swiss franc and hit its lowest point in almost two years versus the dollar on Friday as the war in Ukraine lowered expectations of European economic growth.

The European single currency fell 2.1% this week, and was set for its worst week since April 2020.

It was down 0.5% to $1.1010 at 0850 GMT, near its weakest level since May 2020, following news Russian forces seized the largest nuclear power plant in Europe after a building at the complex was set ablaze during fighting with Ukrainian defenders, Ukrainian authorities said on Friday.

Authorities later said the fire in a building identified as a training centre had been extinguished. U.S. Energy Secretary Jennifer Granholm said there were no indication of elevated radiation levels at the plant.

Versus sterling, the euro also hit its weakest level of 82.61 pence since July 2016. It touched its lowest level since January 2015 of 1.0114 against the safe-haven Swiss Franc.

Analyst said the effects of surging energy and gas prices will likely undermine European consumption and economic growth prospects.

"The ECB is going to have no alternative but to look through this surge in inflation but the Fed is not going to delay so we will see more monetary divergence again," said Mike Kelly, head of global multi-asset at PineBridge Investments.

"The dollar should be getting a new spring in its step structurally if things do get worse," Kelly added.

The U.S. dollar index rose 0.36% to 98.073, after touching its highest level since June 2020 against a basket of peers.

While money markets do not expect interest rate hikes at the ECB's next meeting, the U.S. Federal Reserve is all but certain to raise interest rates at its March 15-16 meeting for the first time since the coronavirus pandemic.

Fed Chair Jerome Powell repeated his comments that he would back an initial quarter percentage point increase in the benchmark rate.

In Ukraine, Russian forces were pressing on with surrounding and attacking cities.

Elsewhere, the Australian dollar continued its advance, helped by the commodities boom, and rose 0.6% to a four-month high of $0.7370 versus the U.S. dollar.

High energy prices in turn have prevented the Japanese yen from benefiting as much from the safe haven flows, as Japan is a net importer of energy.

The yen briefly climbed on the dollar when news of the fire emerged, but later gave up those gains and was little changed at 115.37 per dollar.

rouble bonds over accusations of Moscow meddling in the U.S. election.

  - Western capitals have started putting in place fresh restrictions on Russia's sovereign debt as they seek to ratchet up pressure on Moscow over the conflict with Ukraine.

The United States and its allies introduced an initial round of sanctions after Russian President Vladimir Putin recognised two breakaway regions in eastern Ukraine on Monday. A string of harsher measures is expected after he launched a full-scale invasion on Thursday.

as the crises occurs the market you are looking for is not variable and some variations occurs for that to make your trading experience better FOREX ADVICE CLUB is havin all the knowledge to provide the best profits to you .

Access to Russian bonds had become increasingly restricted. U.S. sanctions imposed following the 2014 annexation of Crimea made future Russian dollar-denominated debt ineligible for many investors and key indexes.

In April 2021, U.S. President Joe Biden barred U.S. investors from buying new Russian rouble bonds over accusations of Moscow meddling in the U.S. election.

Here is an overview of what measures have already been added and what impact they might have:

WHAT ARE THE NEW RESTRICTIONS ON SOVEREIGN DEBT?

Washington announced a ban on U.S. entities participating in secondary markets for both rouble and non-rouble debt issued by Russia's central bank, the national wealth fund and the finance ministry after March 1.

The European Union agreed new sanctions that will target the ability of Moscow to access the bloc's capital and financial markets as well as services, and ban EU investors from trading in Russian state bonds. Canada's government said it would bar its citizens from engaging in purchases of Russia's sovereign debt.

Britain said on Wednesday it would stop Russia selling sovereign debt in London - one of the world's major financial centres for such transactions. The measures would require additional legislation, according to Western officials, and clearing transactions would also be affected. However, there was no indication on whether Britain would stop trade in outstanding sovereign debt.

The coordinated measures are aiming to curb Russia's ability to raise new foreign financing and plug some loopholes. Despite the limitations in the United States, Russia had been able to issue bonds in European markets.

Analysts at JPMorgan (NYSE:JPM) calculate that Russia has issued a combined 3.5 billion in euro-denominated bonds since 2020.

IMPLICATIONS FOR INVESTORS

Analysts see limited implications for holders of existing hard-currency bonds.

They, however, predicted the new U.S. sanctions on local sovereign bonds, so-called OFZs, would lead to the creation of two different classes of OFZs.

In response to the U.S. curbs on local sovereign bonds, the finance ministry said it would offer only new series of OFZs starting from Feb. 22 and stop tapping issues registered before this date "to lower risks of forced selling of circulating state securities by particular categories of foreign investors."

JPMorgan said that bonds which had been sold since mid-June had a 10-25 bps premium over existing issues, though this divergence faded, likely due to bonds being added to the most widely used emerging fixed income benchmark.

"However, premia may be more persistent this time given that new OFZs will not be index eligible," said Nicolaie Alexandru-Chidesciuc at JPMorgan. "As long as local banks can freely transact with foreigners the basis between the two curves should remain relatively narrow (within 20-30bp)."

WHAT DOES THIS MEAN FOR CAPITAL FLOWS?

Latest data shows that Russia has just under $40 billion in dollar and euro-denominated bonds outstanding, with just over half held by foreign investors. Positioning in those bonds by foreign investors looked light and the most underweight in two decades, according to a JPMorgan emerging market client survey.

Meanwhile foreign investors held around 18% or 2.8 trillion roubles ($34.4 billion) of overall outstanding OFZs, according to ING.

The new U.S. sanctions are not expected to trigger forced selling in OFZs. However, capital flows have shown investors ditched the bonds as tensions over Ukraine have escalated since late last year.

"Russia is now experiencing the fifth consecutive month of foreign portfolio outflows from OFZ," said Chris Turner, global head of markets at ING. "In October-January it totalled $5.4 billion, and since the beginning of February, some $1.1 billion were withdrawn."

Russia currently has a weight of 6.8% in JPMorgan's local sovereign debt benchmark, though given the U.S. measures would see no new issues added while existing ones would mature, the weighting was expected to shrink to below 5% in just over three years, the bank projected.

JPMorgan, which runs some of the most widely-used hard and local currency fixed income indexes in emerging markets, said on Wednesday it was reviewing the impact the new U.S. curbs may have on its emerging market benchmarks.

($1 = 81.3255 roubles)

📕 Prediction on Gold on February 17, 2022:

- In yesterday's trading session, precious metal Gold went right in its analysis when it bounced up from 1850 to 1872, closing yesterday's session with a bullish candle around 1869. With Gold in today's trading session. Yesterday, it regained its upward momentum after having 1 previous decline, in my opinion, it is likely that in today's session, Gold will still be supported by this increase.

 - Switching to the H4 time frame, we can see that the increase of the last 3 candles is relatively good and if in the beginning of today's session, Gold has a slight correction around 1862, this is an opportunity. so that ace can establish a buy position with a safe target in the "old top" zone 1872-1878.