- The Nord Stream 1 pipeline has been closed down for maintenance again.
- Markets are expecting 75bps rate hikes in the US and Europe.
- Investors expect Eurozone inflation to hit 9% in August.
Today’s EUR/USD forecast is slightly bearish. A major gas pipeline from Russia to Europe was shut down on Wednesday, escalating the economic conflict between Moscow and Brussels and increasing the likelihood of a recession and energy rationing in some of the wealthier nations in the region.
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European nations have accused Russian President Vladimir Putin of using energy supplies as a “weapon of war”, and they are concerned that Moscow may prolong the outage in retribution for sanctions placed on it by the West following its invasion of Ukraine. Moscow disputes this.
The anxious wait until Saturday morning, when supplies are anticipated to restart following pipeline repair, appears to be filled by investors’ concerns about interest rates.
Markets anticipate 75 basis point rate increases on both sides of the Atlantic next month and have started to react negatively to positive economic news when it supports increases.
The day’s data is anticipated to reveal that European inflation reached a record high of 9% in August.
Although Europe’s gas prices have decreased from record highs, it is little consolation given that the gas price has tripled since June. For the time being, the euro is clinging unconvincingly to parity.
EUR/USD key events today
Today is an important day for EUR/USD as investors will receive eurozone inflation data which is expected to show inflation at 9%. Investors will also be keen on German unemployment data. Finally, the ADP nonfarm employment change report from the United States will be closely watched.
EUR/USD technical forecast: Consolidation at parity
The 4-hour chart shows the price trading not too far from the 30-SMA and the RSI slightly above 50. This signifies that neither bears nor bulls are committed to pushing the price beyond a specific region.
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The price is caught in a range between 1.00507 as resistance and 0.99003 as support. In the middle of this is a solid psychological level, 1.0 or parity. The price seems to be trading around this level. This might be because big players stay out to see which side will win. At the end of it all, the price will trade above or below parity.
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