The European currency shows a weak growth, testing the level of 1.0535 for a breakout. Traders are acting cautiously ahead of the publication of the decisions of the world's central banks on monetary policy. On Tuesday, December 13, the meeting of the US Federal Reserve begins, and on Thursday, December 15, the meetings of the European Central Bank (ECB) and the Bank of England will take place. In all three cases, interest rates are expected to increase by 50 basis points, but the future prospects of each of the regulators remain unclear.
The European Central Bank is likely to continue to adjust the value early next year, but will act very cautiously given that the inflation rate in the region is gradually declining. November data on the Consumer Price Index in the euro area will be published on Friday, December 16, and in Germany they will be released today. The current forecasts do not imply any changes from previous data (-0.5% MoM and 10.0% YoY). Also today there will be a report from the Center for European Economic Research (ZEW) on the level of economic sentiment. Current forecasts suggest that the Economic Sentiment index for the euro area could fall sharply from -38.7 points to -67.2 points, while the Current Situation index in Germany is expected to rise slightly in December from -64.5 points to -57.0 points.
The International Energy Agency (IEA) predicts a reduction in Russian pipeline gas supplies to the EU by more than half, to 60.0 billion cubic meters, not excluding that next year the transportation of fuel can be completely stopped. In this case, the deficit will be 57.0 billion cubic meters and its coverage will require additional measures from the authorities to improve energy efficiency and modernize existing buildings, which will require additional funding in the amount of about 100.0 billion euros and an increase in the resource saving regime. In the meantime, according to Bloomberg reports, 12 EU member states have initiated an even greater reduction in the price ceiling for Russian gas. In a document published earlier, the level of 220.0 euros and the difference of 35.0 euros were called unacceptable and those that require adjustment. An extraordinary council of energy ministers of the coalition will be held today.
Bollinger Bands in D1 chart show moderate growth. The price range is almost unchanged, but it remains rather spacious for the current level of activity in the market. MACD is declining keeping a weak sell signal (located below the signal line). Stochastic is reversing to the downside after an uncertain rise last week, indicating a rough balance of power in the ultra-short term.
Resistance levels: 1.0550, 1.0600, 1.0640, 1.0700. | Support levels: 1.0500, 1.0450, 1.0400, 1.0350.