EU STOCKS AND CRYPTOCURRENCIES REBOUND AS INVESTORS BUY THE DIP

The euro bounced back on Monday even after Emmanuel Macron lost his majority in France’s national assembly. The hung parliament means that Macron will need to strike deals with other parties in the assembly to pass legislation. Marine Le Pen’s party won 89 seats while the left-green alliance won 131 members. The euro also rose as the energy crisis in Europe continued. Last week, Russia decided to cut its natural gas supply to some countries like Germany and France. As a result, Germany has restarted its coal power plants in a bid to reduce rationing.

The British pound rose slightly as investors reacted to the ongoing strikes in the UK. In a statement, the general secretary of Trades Union Congress said that most workers were supporting the ongoing strike by rail workers. Workers like nurses, doctors, and teachers are expected to go on strike. Their concerns is that wages are growing at a slower pace than inflation. For example, while the Bank of England expects inflation will rise by 11%, the government has proposed hiking wages by about 2%. The ONS will publish the latest inflation data on Wednesday.

European stocks and cryptocurrency prices bounced back as investors bought the dip. The DAX index rose by 0.30% while the CAC 40 index rose by 0.50%. Meanwhile, cryptocurrencies like Bitcoin and Ethereum bounced back by double-digits after plummeting sharply during the weekend. Still, there are concerns about the rising consumer inflation and the hawkish central bank decisions. Last week, central banks like the Fed, BOE, and SNB decided to hike interest rates.

XBRUSD

The XBRUSD pair moved sideways after Russia became the biggest seller of oil to China. The pair is trading at 111.44, which was slightly above the intraday low of 110. On the four-hour chart, the pair is along the lower side of the ascending channel. It is below the 25-day and 50-day moving averages while the MACD and the RSI continued falling. The pair will likely continue falling as bears target the key support at 109.

EURUSD

The EURUSD pair continued rebounding in a relatively calm market. It is trading at 1.0521, which is higher than last Friday’s low of 1.0400. On the four-hour chart, the pair is above the 25-day moving average while the Relative Strength Index (RSI) has moved above the neutral point at 50. It is also along the 61.8% Fibonacci retracement level. Therefore, the pair will likely keep rising as bulls target the key resistance at 1.058.

GBPUSD

The GBPUSD pair moved sideways ahead of the UK consumer inflation data. It is trading at 1.2257, where it has been since Friday. On the hourly chart, the pair is trading at the 25-day moving average while the Relative Strength Index has moved above the neutral point. It has also formed a rising wedge pattern, signaling that it will likely have a bearish breakout soon.