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EU Countries Agreed on the Price limit for Russian Oil

12/5/2022 12:13 PM

The EUR/USD pair is correcting around 1.0562.

The trading instrument is actively increasing in value after the decision of the European authorities to set a price ceiling for Russian oil: deliveries by sea will be limited to 60,0 dollars per barrel, which will not include insurance costs, freight, and other surcharges, so the actual cost of purchases may fluctuate a few dollars. In response, Russian Energy Minister Alexander Novak said that price caps are a non-market mechanism, and the Russian Federation will not sell oil to countries that support this initiative, even if Russia will have to cut oil production. Experts believe that supplying Russian oil to alternative markets can increase record inflation in the EU. Meanwhile, the region's macroeconomic statistics show a negative trend: the EU producer price index fell by 2.9% in October after rising by 1.6% in September, leading to a slowdown to 30.8% YoY from 41.9%. Manufacturing in France also continues to slow, with industrial output down 2.6% in October after falling 0.9% in September.

The weakening US dollar remains the main reason for the positive dynamics of the EUR/USD pair: this week, trading started at 104.00 in the USD Index, which has not been seen since mid-summer. Investors were disappointed by the data on the labor market: the unemployment rate in the US remained at 3.7% in November and did not decrease, despite the expectations of experts, nonfarm payrolls increased by 263.0K instead of 284.0K a month earlier, and the number of workers jobs in the manufacturing industry rose by only 14.0K after rising by 36.0K last month.

On the daily chart, the trading instrument is correcting upwards, confidently holding above the resistance line of the local ascending corridor.

Technical indicators maintain a stable upward signal: fast EMAs on the Alligator indicator expand the range of fluctuations in the direction of growth, and the AO oscillator histogram forms rising bars in the buying zone.

Resistance levels: 1.0640, 1.0850. | Support levels: 1.0490, 1.0320.

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