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Europe’s energy crisis affects the markets

October 12, 2021

EUR/USD: The euro fell on Monday as investors remained confident the U.S. Federal Reserve will announce a tapering of its massive bond-buying next month despite softer U.S. payrolls figures. U.S. currency and fixed income markets are closed on Monday for a holiday, but the yield on benchmark 10-year Treasuries hit a four-month high of 1.61% on Friday, even after data showed the U.S. economy created the fewest jobs in nine months in September, missing forecasts. Immediate support is seen at 1.1540. A breakout to the downside could take the pair towards 1.1500 (psychological level).

SELL STOP 1.1540/TP 1.15/SL 1.1560


USD/CAD: The Canadian dollar dipped against the U.S. dollar on Monday amid the growing demand for the USD due to the global energy crisis. Oil and coal shortages have hit several major economies in recent weeks, with factory shutdowns in China. Oil prices jumped on Monday to the highest levels in years, fueled by rebounding global demand that has contributed to power and gas shortages in key economies like China. If oil prices keep rising, the Canadian dollar will benefit further. In addition, strong statistics on the Canadian labor market are on the side of CAD buyers. Immediate support is seen at 1.2440. A breakout below could take the pair towards 1.2350.

SELL STOP 1.2440/TP 1.2350/SL 1.2470


GBP/USD: Sterling fell against the dollar on Monday after an early rally on hawkish BOE comments. Governor of the Bank of England Andrew Bailey and a member of the Monetary Policy Committee Saunders signaled an imminent hike in interest rates to curb inflation. In an interview, Bailey said high inflation needs to be brought under control to prevent it from becoming a permanent factor. Immediate resistance can be seen at 1.3630. A breakout to the upside can trigger growth towards 1.37.

BUY STOP 1.3630/TP 1.37/SL 1.3610