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EURUSD RECOVERY FALTERS EVEN AFTER STRONG EU GDP DATA

American equities were mixed in the futures market as investors braced for a busy week in terms of quarterly earnings. Dow Jones and S&P 500 index declined by about 0.35% while the Nasdaq 100 index rose by about 17 points. Some of the top companies that will publish their results this week are Alphabet, Apple, Meta Platforms, Amazon, and AMD. These equities also reacted to a hawkish statement by Raphael Bostic. In a statement during the weekend, the Fed official warned that the bank could be inclined to implement rate hikes in a batch of 50 basis points, which is higher than the 25 bps that most analysts expect.

The price of crude oil held steady as concerns about Ukraine continued to linger. The US and some of its western allies are said to be preparing a set of sanctions on Russia and some of Vladmir Putin’s allies. These sanctions will hit broad sectors like finance, oil and gas, and other industries. Analysts expect some supply disruptions because of the vast volume of oil that Russia ships around the world because it is the third-biggest producer. Oil prices are also reacting to an upcoming meeting among OPEC members in which they will deliberate on the  March supply. The cartel is expected to maintain its supply caps during this meeting.

The euro found substantial resistance when it attempted to rebound today. The currency was reacting to several catalysts. First, data by Eurostat reflected that the Eurozone economy showed resilience even as the Omicron surge continued. The economy grew by 0.3% in the fourth quarter of last year after slowing by 2.2% in the previous quarter. This growth was attributed to the overall growth of countries like France, Spain and Italy and dragged by Germany. Italy, the bloc’s third-biggest economy, rose by 2.6% in the quarter. The pair also reacted to the re-election of Sergio Mattarella as president, ensuring the survival of Mario Draghi’s government.

EURUSD

The EURUSD pair rose to an intraday high of 1.1183 and then quickly erased those gains. The highest point was notable since it was the lowest level in November last year. The pair has formed what looks like a bearish flag pattern and moved slightly below the 25-day moving average. The Relative Strength Index is slightly above the oversold level. Therefore, the pair will likely continue the bearish trend in the near term.

XBRUSD

The XBRUSD pair held steady ahead of the upcoming OPEC+ meeting. The pair is trading at 88.82, which is slightly below last week’s high of about 90. The pair is along the 25-day moving average while the Relative Strength Index is slightly below the overbought level. Therefore, while fundamentals are supportive, a pullback cannot be ruled out as some investors start taking profits.

XAUUSD

The XAUUSD pair was little changed today. The pair is trading at 1,792, which is slightly above last week’s low of 1,780. On the four-hour chart, the pair has moved slightly moved slightly below the 38.2% Fibonacci retracement level. It has also declined below the 25-day moving average. Therefore, the pair will likely continue falling as sellers target the support at 1,760.

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