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EU Leaders Agree on Joint Gas Purchases

10/21/2022 12:43 PM

The EUR/USD pair is moving in a corrective trend around 0.9775.

The instrument continues to slowly decline, despite the incoming positive signals after the summit of EU leaders yesterday, at which, according to the head of the European Council, Charles Michel, they managed to reach a common agreement in the field of energy security. In particular, the prospect of creating a cartel of European gas buyers, which will be engaged in the purchase and subsequent gas distribution to all countries of the region, is being considered. At the initial stage, it is planned to allocate up to 15% of the total volume of purchases to the organization, and in case of its successful work, increase this figure. As for the macroeconomic component, inflation growth to 9.9% in September was already priced in, thanks to which the market reaction was restrained, and investors are preparing for the next increase in interest rates by members of the European Central Bank (ECB).

The US dollar continues its active upward trend and almost reached 113.000 in the USD Index yesterday, supported by data on the labor market: Initial Jobless Claims decreased to 214.0K from 226.0K a week earlier, although analysts' forecasts assumed a value of 230.0K.

The trading instrument moves within the downward global channel near the resistance line.

Technical indicators are working out an upward correction, but the global trend is downward, putting pressure on the price: fast EMAs on the Alligator indicator are below the signal line, and the AO oscillator histogram forms bars below the transition level.

Resistance levels: 0.9870, 1.0100. | Support levels: 0.9700, 0.9537.

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