EURO: OPEC+ and China Reopening Hopes Cause the Euro to Rise.

Market Analytics and Technical Considerations

Key Points

• Today, the Euro increased once more while the US Dollar declined.
• Prospects were improved by positive US jobs data and stable OPEC+ production.
• The markets’ longing for a reopening of China may soon come true.

In the Asian session today, the EUR/USD reached a five-month high as the US Dollar is once more under pressure. The upbeat, risk-taking attitude to begin the week has been influenced by a number of macro factors.

The US jobs report from last Friday and any ramifications it may have for the Federal Reserve at the Federal Open Market Committee (FOMC) conference on December 14 are still being processed by the market. The non-farm payroll change for November was 263k, well exceeding the 200k estimate.

Then, so over weekend, OPEC+ met and decided not to extend the previously established output restrictions.

As a result, crude oil prices are higher, with the WTI futures reaching a high of US$ 81.84 bbl and the Brent contract reaching a high of US$ 87.60 bbl. Going into the European day, both contracts have now pulled back to a lower price.

Restrictions imposed by the G-7 and the EU on Russian oil exports are now in place.

On Monday, China loosened travel restrictions in a number of significant cities, sparking prospects of a Covid-19 policy change for the second-largest economy in the world.

With an increase of more than 3%, Hong Kong’s Hang Seng Index (HSI) set the pace for gains in Asian equities markets. Each market linked to a reopening has experienced a strong rally.

TECHNICAL ANALYSIS OF EUR/USD

The fact that the EUR/USD has gone beyond all period simple moving averages (SMA) would suggest that the positive momentum is likely to persist.

The breakpoint of 1.0638 or the previous peaks of 1.0615, 1.0774, and 1.0787 may serve as resistance.

Support on the downward might be found at the preceding recessions of 1.0290 and 1.0223, or at the thresholds of 1.0497 and 1.0482.

Exponential Moving Averages (Daily)

Indicators