Edward Culchenko
Today, on April 2nd, the common European currency is down by 0,17% against the US Dollar. At this point, it is trading around 1.3768 after the USA released some of its economic reports scheduled for the week. The figures came out positive, thereby indicating further economic growth in the USA after cold winter. This definitely supported the American currency in general.
Meanwhile, gold prices are up by 0,9% after the EU and the USA published their statements during the energy summit in Brussels. After the summit, the NATO announced its intention to work out a response to Russia's annexation of the Crimea, which is considered an intervention. The response was promised to be ready by April 15th.
Within the framework of the energy summit in Brussels, the USA and the EU promised to provide Ukraine with energy support in order to reduce its dependency on Russian natural gas supplies. The sides are also determined to work out an efficient plan aimed at diversifying Europe's energy imports.
The high-ranking politicians representing the USA and the EU at the summit urged Russia to treat its energy partners properly and underlined that the energy problem can be consider Europe's number one problem at this point, which needs an urgent solution, especially as Russia raised natural gas prices for Ukraine.
As we know, Russia exports its natural gas to Western Europe through Ukraine. Therefore, the EU is concerned that Russia may stop exporting natural gas to Ukraine and further up to the EU due to the fact that Ukraine has already accumulated a huge debt for natural gas and currently owes Russia over 2 billion dollars for natural gas. Moreover, the debt is likely to increase since the price is up. After the Brussels summit, natural gas futures traded at CME gained in value 1,4%.
Forex: EURUSD Outlook
According to the recent comprehensive technical analysis conducted by Masterforex-V Academy, the H4 chart of EURUSD still indicates a mid-term rally started on March 13th from 1,3479 up to 1,3966. The rally was followed by a retracement down to 1,3703. This week, the currency pair is still trading within the scope of the 1,3703 – 1,3820 price range.
The bullish count is represented by green arrows.
When switching to H1, we can see the end of the retracement and the likely beginning of an EW bullish momentum along the existing mid-term trend. While the price is to the left of the MF sloping channel (the green line), the upward tendency holds true.
A further rally is possible, especially if the price breaks and consolidates above 1,3820. If this is the case, the next target is 1,3845.
The market is waiting for the ECB meeting and its results. The meeting is scheduled for April 3rd. Most traders and investors assume that the market is not going to be changed and is likely to remain low at 0,25%. So, the ECB’s interest rate decision is likely to be the market driver of the day.
If the retracement resumes, the price is likely to pin through 1,3768, thereby changing sides relative to the MF sloping channel. If this is the case, the closest level of support will be found at 1,3721 and 1,3703.
Edward Culchenko
