What is the next move for the Euro?

Mthokozisi Mpofu Knars Capital

The chart below shows the eurusd which we believe has been in an impulsive move lower in a possible five-wave move. The five waves lower are not yet complete we are in the middle of wave four. We believe wave three is complete, and we are in the middle of a wave four higher.

We have labeled the current price action in a channel at 1.07000, which is also the 38.2 Fibonacci retracement. We would ideally like to see prices respect this level and impulsively continue to the downside to complete wave five. We have a target of 1.03000 as our possible wave five completion. We expect the euro to gain strength for the rest of 2023.

Inflation in Europe has continued to trend to the downside and we see the ECB holding rates stable for the rest of 2023. Energy costs continue to rise caused by conflict in the Middle East. If energy prices stay stable, we can see the euro gaining strength compared to the broader market.

Key news out this week: EURO 23rd October French Flash Manufacturing PMI, French Flash Services PMI, German Flash Manufacturing PMI, German Flash Services PMI, 25th October German Ifo Business Climate, ECB President Lagarde Speaks, 26th October Main Refinancing Rate, Monetary Policy Statement, ECB Press Conference

Res: 1.07000; 1.07580; 1.08300

Sup: 1.04000; 1.03600; 1.03000

Author

Mthokozisi Mpofu

Knars Capital

Mthokozisi Mpofu is the Managing Director of Knars Capital Pvt Ltd, an investment advisory firm helping African SMEs secure growth capital and become investor-ready.

EUR/USD climbs to two-week highs beyond 1.1900

EUR/USD is keeping its foot on the gas at the start of the week, reclaiming the 1.1900 barrier and above on Monday. The US Dollar remains on the back foot, with traders reluctant to step in ahead of Wednesday’s key January jobs report, allowing the pair to extend its upward grind for now.

GBP/USD hits three-day peaks, targets 1.3700

GBP/USD is clocking decent gains at the start of the week, advancing to three-day highs near 1.3670 and building on Friday’s solid performance. The better tone in the British Pound comes on the back of the intense sekk-off in the Greenback and despite re-emerging signs of a fresh government crisis in the UK.

Gold treads water around $5,000

Gold is trading in an inconclusive fashion around the key $5,000 mark on Monday week. Support is coming from fresh signs of further buying from the PBoC, while expectations that the Fed could turn more dovish, alongside concerns over its independence, keep the demand for the precious metal running.

Crypto Today: Bitcoin steadies around $70,000, Ethereum and XRP remain under pressure

Bitcoin hovers around $70,000, up near 15% from last week's low of $60,000 despite low retail demand. Ethereum delicately holds $2,000 support as weak technicals weigh amid declining futures Open Interest. XRP seeks support above $1.40 after facing rejection at $1.54 during the previous week's sharp rebound.

Japanese PM Takaichi nabs unprecedented victory – US data eyed this week

I do not think I would be exaggerating to say that Japanese Prime Minister Sanae Takaichi’s snap general election gamble paid off over the weekend – and then some. This secured the Liberal Democratic Party (LDP) an unprecedented mandate just three months into her tenure.

Ripple exposed to volatility amid low retail interest, modest fund inflows

Ripple (XRP) is extending its intraday decline to around $1.40 at the time of writing on Monday amid growing pressure from the retail market and risk-off sentiment that continues to keep investors on the sidelines.