Positive news for the EU supports the euro

27 December 2022 151
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The price of energy remains the main topic for the EU, as it determines the future level of inflation, budget deficits, economic growth, etc. The latest news should give Europeans hope and make the euro grow.

Europe's wind output surged last week. At the same time, the level of gas injection into underground storage facilities in the region exceeded its extraction rates for the first time since the beginning of the heating season. It was announced by Wind Europe, along with Gas Infrastructure Europe (GIE).

The possibility of using alternative energy sources alleviates the EU energy crisis. Thus, it is possible to replenish gas reserves even during winter.

 

Russian Deputy Prime Minister Alexander Novak said that the country has an opportunity to supply gas through the Yamal-Europe pipeline again. 

TASS news agency quoted Novak as saying that interaction with the European market is still relevant. The politician noted that the need for natural gas remains, and Russia has the opportunity to resume supplies.

Hints of warmer relations with Russia are increasing the amount of positive sentiments. This news has caused the price of gas in Europe to fall below $1,000 per 1,000 cubic meters. Fundamental factors hint at possible continuation of EUR/USD growth.

 

As was noted yesterday, volatility in the world markets is now fading because of the holidays. The world is quiet at the moment. Therefore, on the background of a potential Christmas rally, the weakening of the dollar is likely to continue.

 

According to the technical analysis, EUR/USD on an hour time frame is located at the upper border of the sidewall. In recent days, the volatility in the euro has noticeably shrunk, so an impulsive movement is possible when exiting the rectangle. According to the oscillator RSI on the daily timeframe there is room for growth, the indicator is not yet in the overbought zone. It also shows a compression of volatility relative to previous months.

 

The growth target may be the renewal of the local highs and reaching the level of the flat base, which was in May 2022. It is the level of 1.076. Stop-loss can be placed in case of an exit from the rectangle down at the level of 1.056.

 

Growth of the currency pair EUR/USD:

Take profit – 1.076

Stop-loss – 1,056

 

This content is for informational purposes only and is not intended to be investing advice.

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