Energy crisis hits EUR and oil rises ahead of OPEC
EUR/USD => The euro falls to 0.99
BTC/USD =>The cryptocurrency remains below $20k
Oil => The commodity rises towards $90
EUR/USD drops as Russia halts gas supplies
EUR/USD traded flat across the previous week as hawkish comments from the ECB helped the euro remain resilient against the USD.
The greenback rose to a 2 decade high on bets that the Federal Reserve may hike interest rates more aggressively. However, the US eased lower on Friday after the US non-farm payroll showed that the participation rate increased, which could help wage growth to cool. Today the euro trades lower as investors price in fears over energy security and the possibility of gas rationing after Russia cut the gas supply to Europe.
Attention will also be on Eurozone retail sales, which are expected to edge higher in July after a steep fall in June. Investor sentiment data and the composite PMI are also due to be released. Meanwhile, the US observes a public holiday, so volumes could be light.
| US NFP August | Actual: 315k (213k) | Previous: 528k |
Where next for EUR/USD?
EUR/USD trades below its 20 & 50 sma in a bearish chart.
While it remains out of oversold territory, the RSI supports further downside. Sellers need to break below 0.9898, last week’s low, to continue the bearish trend towards 0.99 round number and a deeper selloff to 0.9650, the falling trendline support.
On the flip side, a move over 1.0090 last week’s high, the late July low, and the 20 sma could expose the 50 sma at 1.0175. A move over 1.0380 creates a higher high.
BTC/USD remains depressed after jobs data
Bitcoin has lost ground across the weekend despite the US non-farm payroll report seeing investors pare back bets of aggressive Federal Reserve hikes.
According to the CME Fed watch tool, the market is pricing in a 57% probability of a 75-basis point rate hike, down from 74% prior to the non-farm payroll. BTC/USD continues to trade below the key $20k psychological level for a ninth straight day, finding support on the downside at 19511, the December 2017 high.
Near term, there are few signs of directional bias as the cryptocurrency consolidates. However, considering a longer-term view, the chart is still bearish. If buyers fail to defend 19511, BTCUSD could see another leg lower to 17585. It would take a move over 25,111 to turn the trend bullish and create a higher high.
Oil looks to OPEC+
Oil fell over 6% last week as fears over a global economic slowdown hurt the oil demand outlook.
Tighter monetary policy expectations, more COVID lockdowns, and slower growth in China pulled the price lower. Traders shrugged off an announcement by the G7 of plans to cap the price of Russian oil. In retaliation, Russia has halted gas flow along the Nord Stream pipeline. As a result, prices across the energy complex rise at the start of the week.
Attention will now turn to OPEC+, who meet today to discuss oil output quotas for October. While Saudi Arabia has floated the idea of cutting output, expectations are for OPEC+ to hold production steady for now.
Support can be found at 85.00 (August low) and 80.00 (round number).
Resistance for the pair can be seen at 90.80 (20 sma) and 96 (50 sma).
