EURCHF FORMS BEARISH PENNANT AS EUROPE GAS CRISIS ESCALATES

The euro declined sharply against the US dollar as the energy crisis in Europe continued. In a statement, Germany warned that Russia’s moves to slash gas supplies to the region could have a major impact that compares to the collapse of Lehman Brothers. The bloc’s energy companies are being forced to cover volumes at significantly higher prices and making substantial losses. As a result, Germany could go without power, which will affect the country’s economy. Russia has been gradually reducing its energy supplies to Europe since the war began.

The British pound retreated slightly after the latest flash manufacturing and services PMI numbers. According to Markit, the country’s composite PMI rose from 51.8 in May to 53.1 in June. This growth was driven by the strong performance of the services sector. The services PMI rose to 53.4 while the manufacturing PMI fell to 53.4. These numbers mean that the two sectors are doing relatively well even as numerous challenges remain. For example, there is the challenge of the ongoing strike by rail workers and the soaring inflation.

US futures rose sharply on Thursday as investors waited for the second straight day of testimony by the Fed Chair, Jerome Powell. After testifying before a senate committee on Wednesday, he will now move to the House of Representative. He will be asked about the soaring inflation and what the bank is doing. In his testimony, the Fed chair said that the bank will continue hiking interest rates in the coming months until it sees signs that inflation is moving to the 2% level. The other key data to watch later today will be America’s flash manufacturing and services PMIs and US inventories data.

GBPUSD

The GBPUSD pair dropped to a low of 1.2170, which was lower than last week’s high of 1.2400. On the four-hour chart, the pair moved to the 25-day moving average while the Relative Strength Index (RSI) is moving sideways. It is at the 38.2% Fibonacci Retracement level. Therefore, the pair will likely continue falling during the American session.

EURUSD

The EURUSD pair dropped to a low of 1.0480, which was the lowest level since June 20. On the four-hour chart, the pair moved to the rising trendline that is shown in green. It also moved between the lower and middle lines of the Bollinger Bands while the DeMarker indicator has pointed downwards. It has also formed an ascending triangle pattern. Therefore, the pair will likely have a bullish breakout in the coming days.

EURCHF

The EURCHF pair has been under pressure after the hawkish policy by the Swiss National Bank (SNB). The bank decided to hike interest rates for the first time in 15 years. The pair has formed a bearish pennant pattern that is shown in green. The Relative Strength Index (RSI) and the Stochastic Oscillator have moved lower. Therefore, the pair will likely continue falling as bears target the key support at 1.0100.