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Low Gas Price in the EU Supports the Euro

12/21/2022 12:08 PM

After another decline in gas prices in the EU, the EUR/USD pair continues its confident dynamics, trading around 1.0609.

Thus, according to data from the TTF exchange, the price for gas contracts with delivery in February is now 1120.0 dollars per 1.0K cubic meters, which was last observed in June, when the Nord Stream gas pipeline maintained maximum pumping levels. The current low quotations provide an opportunity for countries in the region to conclude long-term deals for supplies in the spring, as the storage facilities are almost full now. Meanwhile, in November, the German producer price index lost 3.9%, which led to a slowdown in growth to 28.2% YoY from 34.5% earlier.

The US currency is falling to 103.700 in the USD Index today after the release of building permits data, which stood at 1.342M in November, well below October's 1.512M, signaling a significant weakening in the housing market. The volume of construction of new houses also decreased, although not so significantly: the figure was 1.427M against 1.434M earlier, losing 0.5%.

On the daily chart, the trading instrument continues its corrective growth and confidently holds in the local ascending corridor.

Technical indicators point to continued growth: fast EMAs on the Alligator indicator are quite far from the signal line, and the AO oscillator histogram forms corrective bars high in the buying zone.

Resistance levels: 1.0675, 1.0900. | Support levels: 1.0525, 1.0320.

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