Euro crosses looking perky

European stock markets have outperformed so far this year, with the euro also showing relative strength. Investors have been pricing out risks that had been associated with EU markets, including a sharp recession in the eurozone and rationing of gas. But thanks to a mild winter so far, an energy crisis has been averted. Meanwhile economic data has not been as bad as feared. In addition, China’s re-opening has boosted hopes over Eurozone exports, especially given the big drop in shipping costs.

The euro has been further supported by hawkish comments from the ECB President Christine Lagarde who in December said the market should be expecting the central bank to raise interest rates at a 50 basis-point pace “for a period of time.”

The euro thus remains supported for now, especially against currencies where the central bank is deemed to be slightly more dovish than the ECB – among others, the pound and yen. But even against other major currencies, we could see the single currency start to appreciate from here.

EUR/GBP

The EUR/GBP has risen as investors expect the gap between monetary policies in the UK and Eurozone to narrow and given the above developments. A break above 0.8870 resistance level could pave the way for a move towards 0.90 handle next, where we also have the 61.8% Fib level converging.

EUR/CHF

The EUR/CHF has been stuck inside a very narrow since mid-November with 0.9900-0.9910 area offering consistent resistance. Until today. As a result of the recent consolidation, last year’s downward momentum has completely been lost. The 21-day exponential average has started to point higher and the 200-day average, which is still pointing lower, was now being tested from underneath. Given that the ECB has remained hawkish and European data has improved a little, with an energy crisis not materialising, some of the downside risks for the euro has diminished. So, this bullish breakout could hold, and if it does, we might see a strong recovery in this pair.

EUR/JPY

The EUR/JPY has been creeping higher in recent days after reclaiming the 200-day simple average and 21-day exponential average. Price has risen above 142.00 resistance in another bullish development. For confirmation we now need to see a higher high above 142.95 now.

EUR/NZD

The EUR/NZD pair is looking increasingly bullish as it continues to hold above the 21-day exponential average. A breakout from the triangle patter looks likely, with the bulls eying a move north of 1.70 now that 1.6900 has been reclaimed.

StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please ensure you fully understand the risks involved by reading our full risk warning.

FOREX.com is a trading name of StoneX Europe Limited, and FOREX.com/ie is a domain operated by StoneX Europe Ltd, a member of StoneX Group Inc. StoneX Europe Ltd, is a Cyprus Investment Firm (CIF) company registered to the Department of Registrar of Companies and Official Receiver with a Registration Number HE409708, and authorized and regulated by the Cyprus Securities & Exchange Commission (CySEC) under license number 400/21. StoneX Europe is a Member of the Investor Compensation Fund (ICF) and has its registered address at Nikokreontos 2, 5th Floor, 1066 Nicosia, Cyprus.

StoneX Europe Limited is registered with the German Federal Financial Supervisory Authority (BaFin). BaFin registration ID: 10160255

FOREX.com is a trademark of StoneX Europe Ltd, a member of StoneX Group Inc.

The statistical data and the awards received refer to the Global FOREX.com brand.

This website uses cookies to provide you with the very best experience and to know you better. By visiting our website with your browser set to allow cookies, you consent to our use of cookies as described in our Privacy Policy.

Through passporting, StoneX Europe is allowed to provide its services and products on a cross-border basis to the following European Economic Area ("EEA") states: Austria, Bulgaria, Croatia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden.

Additionally, StoneX Europe Ltd is allowed to provide Investment and Ancillary Services to the following non-EU jurisdiction: Switzerland.

StoneX Europe Ltd products, services and information are not intended for residents other than the ones stated above.

Tied Agent Information: KQ Markets Europe Ltd with Company No. HE427857.
Address: Athalassas 62, Mezzanine, Strovolos, Nicosia Cyprus.
Services Provided: Reception and Transmission of Orders.
Commencement Date: 06/12/2022
Website: KQ Markets - CFD Trading | KQ Markets

We may pay inducements, such as commissions or fees, to affiliates or third-party introducers for referring clients to us. This is in line with regulatory guidelines and fully disclosed where applicable.

StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation. StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.