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There are many and while the dominant theme was Putin’s move to price natural gas sales in rubles, which have caused a solid move higher in EU NG and Brent prices, on a more positive note Ukraine President Zelenskyy suggested that “step by step, we're moving forward”.
The moves from Putin were obviously designed to support the RUB, with concerns now elevated that EU importers will cut back as there is no desire to access the Russian central bank to exchange EURs for RUB’s. Buyers of crude tends to lead to EUR weakness, although it’s the GBP has been the weak link in G10 FX – look at the daily of GBPAUD or GBPNZD, it's in free-fall.
EURAUD has 1.4500 written all over it, and I’d hold shorts until the price closes (daily) above the 5-day EMA. EURCAD is breaking the double bottom through 1.3800 and this has 1.3500 written over it in my view.
EURUSD looks to be headed to the neckline of the March double top of 1.0897 – a break here if it happens, and we’re talking 1.0750/00 as a target. It’s been hard to buy USDs as the hedge fund community have been so long of USDs, but if the crude price is going higher then EUR shorts will be the play – the fact Fed member Bullard suggested Europe could easily be heading to a recession is very much being rapidly priced. We’re already seeing EC consumer confidence at the weakest levels since the pandemic. Today’s Euro Council meeting is a potential vol event then, especially if there is any hint of embargos of Russian imports.
EURUSD daily chart
(Source: TradingView - Past performance is not indicative of future performance.)
We also get the Norges Bank (Norway) decision (20:00 AEDT) – A 25bp hike is fully expected – that said, the wind is with the NOK - NOKSEK looks like a momentum buy for 1.1000.
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