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Today’s Notable Sentiment ShiftsEUR – The euro climbed from 22-month lows against the dollar on Tuesday, supported by expectations that the Eurozone will increase fiscal spending to help offset the economic effects of the Russia/Ukraine war. Bloomberg reported that “the European Union plans as soon as this week to jointly issue bonds on a potentially massive scale to finance energy and defence spending.” While Wester Union also argues that “the ECB president may acknowledge euro weakness as among the headwinds facing the bloc’s economy. That’s been enough to offer the euro at least a momentary reprieve.”
by thunderpips
1
EURUSD - Europe WILL PAY for Ukraine WarOur friends in the USA are doing just fine. Far away from trouble, taking advantage of everything and anything. Respect Unfortunately this does not go for the 'Old Lady' Europe. Ukraine situation will affect Europe in many ways and i think that most people are aware of it. Let's go to Reuters that you can trust: Ukraine war sends euro below $1.10 for first time in two years ECB expects Ukraine war to weigh on euro zone growth - de Guindos : Russia's invasion of Ukraine and how the world reacts could have wide-ranging repercussions for the European economy, from rising energy and food prices to economic sanctions that hit trade and investment. That in turn will affect how quickly the economy gets back on its feet after two years of the coronavirus pandemic and the ability of policy-makers, among them the European Central Bank, to wind down emergency support measures. Following are some key variables and vulnerabilities. WHAT IS THE LIKELY IMPACT ON INFLATION? The escalation of tensions into outright conflict has the potential to generate immediate and rapid fuel and food price inflation. European Union countries buy 41.1% of their imported gas from Russia and 27% of their oil: thus, any restriction of supplies would quickly lead to higher energy prices. That would ripple through the economy from higher heating and fuel bills to costlier transport and power for businesses. Food supplies would also likely be hit. Natural gas is the main component in many fertilizers, so higher gas costs would likely push up all crop prices. Separately, Ukraine exported over 33 million tons of grain last year so any disruption there would reverberate across global markets - including in Europe. Overall, Bank of America Securities estimates an escalation could push euro zone inflation up 1 point to 4% for 2022. AND ON TRADE AND INVESTMENT? This will depend on the new sanctions due to be studied by EU leaders at an emergency summit on Feb. 24. They will be "the harshest package of sanctions we have ever implemented", the bloc's foreign policy chief, Josep Borrel said. read more The euro zone's export exposure to Russia has roughly halved since the confrontation over Crimea in 2014, as European firms looked to secure alternative trading partners. EU exports to Russia now amount to 80 billion euros ($89.31 billion) worth of goods annually, worth 0.6% of EU GDP. They are mainly machinery and cars, chemicals and manufactured goods. Among EU countries, Germany is both Russia's biggest exporter and importer; France, the Netherlands, Poland, Italy, Belgium all have sizeable trade. "Coming with strong sanctions against Russia is going to have some impact on the EU economy and we need to be ready for this," European Commission Executive Vice President Valdis Dombrovskis told Reuters on Feb. 23 L8N2UY6WC. The EU is also the largest foreign investor in Russia with total direct investment of 311.4 billion euros in 2019. That pales though compared with 2.16 trillion euros EU companies have invested in the United States. Russian investment in the EU is yet smaller at 136 billion euros. Depending on the severity of any sanctions and counter-sanctions, some or all of the European presence in Russia could be impacted. "On paper it is a lot, but this is only a small fraction of overall foreign direct investment of EU companies," said Daniel Gross, head of the CEPS think tank in Brussels, who added he saw little risk of Moscow wanting to expropriate plants run by EU companies because of the complexities entailed in running them. SO WHAT IS THE OVERALL IMPACT TO THE EURO ZONE ECONOMY? Clearly negative. Higher energy and food prices would sap household purchasing power and erode confidence. Consumption would be hit quickly and investments would likely fall in the weeks and months afterwards. "The geopolitical clouds that we have over Europe, if they were to materialise, would certainly have an impact on energy prices and, through energy prices, an increased cost throughout the whole structure of prices," ECB President Christine Lagarde said in early February, citing hits to consumption and investment. Moreover, since high energy prices hit lower income families the hardest, governments are likely to introduce subsidies, which in turn would put more pressure on state coffers already stretched by pandemic support measures. The Bank of America study reckoned an escalation would put at risk 0.5 percentage point of Europe's output directly through the drag on private consumption. Many consumers have built up buffers in the form of excess savings amassed during the pandemic, but some of those savings have already been eroded by soaring fuel bills. WHAT WOULD THE ECB DO? The challenge for the ECB, which sets monetary policy for the 19 countries sharing the euro, is that the Ukraine conflict has the potential both to add inflationary pressures and depress economic activity. Normally, ECB policy-makers look past short-term volatility because policy is only effective 12 to 18 months out. Still, with inflation already at a record high 5.1% and the ECB planning to unwind stimulus in the coming months, it could come under pressure to act faster to try and counter further price rises even if that risked hitting future output. Others argue this is precisely the reason to stay cautious and not set a fixed date to end ECB's main Asset Purchase Programme - as some ECB policymakers did ahead of the Russian invasion. "Judging the situation from today’s point of view, I would rather favour a continuation of the APP at least until the end of the year, beyond September," Bank of Greece Governor Yannis Stournaras, a member of the ECB's Governing Council, told Reuters. That is what ECB policymakers are likely to debate when they meet in Paris on Feb. 24 for what had initially been billed an informal get-together. It will help shape their decisions at the next policy meeting on March 10. EUROPE WAKE THE F$&% UP!!! THE FXPROFESSOR
by FX_Professor
10
EURGBP: More Pain Ahead For The EURO ? With Risk OFF mood especially hitting both EUR & GBP hard, it is well known that the common shared currency EUR has more painful future compared to the GBP! Here we look at the weekly chart that might support our view on this. First and most important step would be for the weekly candle to close below 0.82900 major support. By doing so, it would ensure a major long term support break and thus opening door to the next support that lies at 0.8000 region. After the break is confirmed, a short trade can be evaluated based on the risk to reward and executed. CHEERS
Short
by FX618Analysis
1
BEARISH VIEW INTACT! RISK OFF MOOD TO DRIVE EURJPY TO 125.400Bearish view still very much intact yet after EURO pushed up higher a few weeks ago, but clearly failed to break the descending channel's upper trendline. With the RUSSIA - UKRAINE crisis predicted to HIT the EUROZONE hard, we could see the safehaven currencies such as CHF, JPY & USD appreciate Vs the EURO. Based on this technical and fundamental analysis, we could see EURJPY steadily approach the 125.400 target area soon. cheers
Short
by FX618Analysis
EURO/USD Technical AnalysisThe past week has been very bullish for euro/usd and the main reason for that seems to be the hawkish tone of the ECB. Looking from the technical point of view, 1.1480 is a very important area on the daily chart because it is the last lower high before the price went to the lower low 1.1150 area. Looking from a market structure point of view, this pair is still in a downtrend unless it takes out this lower high area so I expect the price to go to the -0.27 first and then continue to the -0.618 Fibonacci extension level. But if price breaks 1.1480 area then we could see a continuation of the bullish market.
Short
by alicanuz
1
The bulls took over the market in EUR/USDHello everyone :) I hope you are all doing well. I wondered which is the most interesting instrument suitable for analysis this week and concluded that it is definitely EUR/USD. Cristhine Legarde surprised the market last week when she did not rule out an increase in interest rates this year (although it could be in the last quarter of the year, but it is still very unexpected from the European Central Bank). Inflation in Europe is spiraling out of control and everyone understands that, so the ECB must do something about it. This was a very pleasant moment for the EUR, which showed great performance last week and really strong growth. When it comes to the technical picture, we can see a strong bull candle representing last week's activity This is a weekly chart and we can see that RSI shows bullish divergence while MACD is just truned bull, but the pair has to do some retracement and this may be our chance to go long. One more thing, if we include the Fibonacci retracement in this analysis (which you can see in the chart), we can see that the pair is on a retracement of 0.618 and is closed above that level, which may be another argument for the bulls. I wish you all a good trading week :)
Long
by merjemascerija
Will Euro Reverse Against the British Pound Post ECB and BoE?Following a surprise hawkish pivot by the European Central Bank as the Bank of England raised rates to 0.50% from 0.25%, EUR/GBP rallied the most since April 2021 this week. With markets already pricing in an aggressive BoE, that may leave room for equivalent ECB bets to catch up ahead. That could leave EUR/GBP tilted higher. The pair also closed at the highest since late December, reinforcing the key 0.8277 - 0.8364 support zone that has been in play since 2016. Even though EUR/GBP has been aiming lower since 2020, a closer look reveals that the pair has been consolidating for over 5 years. This has created a large rectangle where the ceiling lays around 0.9270 - 0.9499. The latest bounce off the floor of the rectangle may open the door to extending gains given confirmation. That would prolong the pair's long-term range-bound trend. Immediate resistance appears to be the 78.6% Fibonacci retracement at 0.8538 before a potential falling trendline from 2020 may come into play. On the flip side, a close under the rectangle floor, with confirmation, may hint at ending consolidating, leaving the pair at risk of extending losses. FX_IDC:EURGBP
by QM_Dubrovsky
EURUSD before ECBToday is the ECB Interest Rate decision. We don't expect to see any changes but there's always a market reaction. Usually, the big moves are during the press conference 45 minutes after the Interest rates comes out. Technically, we're looking at this upside move as a pullback and we will be looking for selling opportunities. There's still a chance to see price rising up to around 1,1350 and then finding resistance around those values. That could also happen during NFP tomorrow. Don't rush with your entries before the news or at least use bigger stops in order to protect yourself from those long wicks.
Short
by ForexTrendline
40
EURGBP Long IdeaEURGBP has been in a downtrend since reaching the 0.841 level on the 24th of January. The price has been setting higher lows and lower highs since reaching this key zone. However the price has just fallen towards the support area of 0.83, which in the past has seen price increase from this zone. The RSI indicator on the 30m and 1hr time frame so very undersold levels which complies with our short-term long bias. The target of this trade is at the previous resistance zone (0.833) and above. The stop-loss area for this trade is located 500 points below the current level at 0.826.
Long
by Orion-Markets
The Next Leg DownWelp, I'm calling it. I believe the next leg of this market sell off is coming. I'm sure all of you saw the Asset Bubble Chart.. I just can't believe we will be a part of something like this. I believe the short term bear market rally has about come to its end and we are heading towards another sell off. There is absolutely no news that can prop up markets at this point. The numbers are starting to come in globally, and PMI, GDP world wide is utterly collapsed. Oil while it had a short move upward is still at prices that producers can not maintain. You will see an influx of bankruptcies of oil producers and shale companies. In fact, it already started. World wide, it's no better. Keep in mind that, during America's boom since 2016, most of Europe was in recession. Now imagine how bad the EuroZone is as they entered this crisis already in recession. So, what's my opinion? I believe the EuroZone will collapse first. There is new infighting between the EU and Germany on the ECB's Bond Buying Program. This is potentially catastrophic as the EBC has no stopped their bond buying program since 2010 and they already have their interest rates at -0.45%! Europe has nothing left in their arsenal besides massive printing and stimulus, which will be short lived. After Europe collapses, Japan will be the next country to be hit. Japan has been had some of the worst economics and demographics of any country. They have been printing like never before and their entire country is heading into a depression. Couple this with weaker sales of electronics and vehicles, Japan is going to hit a wall here soon. The Bank of Japan can not save what was done. Lastly, the United States will have its day of reckoning. After decades of unbalanced budgets, printing infinitely, political uncertainty and a general instablity, the US will have a recession that never was before. The Great Recession of 2008 shattered the floor.. and since them they put glue in all the cracks, it held but they added more weight than ever. Every kind of debt is at record levels. The US Federal Tax Revenue is dropping $100,000 even 9 seconds and the US Debt is growing $100,000 every 4 seconds. The last time this Tax Revenue fell was 2008, during the recession. It's over folks. I don't mean to sound like an alarmist but you call a spade a spade when you see it. I believe this is the catalyst to the end of fiat world wide. Besides, historically, about even 30-50 years the world has been on a new global monetary standard since 1900s. The last monetary standard was in 1970s when Nixon killed the Bretton Woods system. So, what'll happen from here? The central banks will do what they always do in a crisis and the printers will be put on max output. Currency will be created like never before. I believe in the next 1-3 years, we will see hyper inflation in the US. Keep in mind, the One-Dollar Zimbabwe was worth $1.40ish USD in 2007. In 2008, we had the infamous 100,000,000,000,000 trillion Zimbabwe notes. Yes, it took just ONE year for hyper inflation to hit. What can I say? Hedge in silver and gold , a little in BTC because at this point who knows what will survive this crash. Dow will fall easily below 10,000.. and we will see the greatest number of unemployed people ever. This virus did a whole lot more damage underneath than we thought. There will NOT be a U-Shaped recovery. Fear has set in, people do not want to return to work and the once insane thought of basic income is now becoming reality. This isn't a chart on how to profit from this down turn, its just a cold reality check. I believe man has held it together for as long as they did but we see, people are no longer patient or caring. People are quicker to jump to conflict than peace. I believe society will also collapse and the once sane moral minded man will descend into violence, rioting, and looting. It sounds far fetched but, man will be man doesn't matter what year it is. static.seekingalpha.com
TVC:DJI
by WorldEconomics
10