The single European currency is losing its position again. Although the scale of Wednesday's decline turned out to be quite modest. But today this process has continued. And it is sustainable. The pound has fully recovered the previous growth, having literally mirrored Tuesday's trading. And by the way, today's trading, as in the case of the single European currency, also began with a further decline. The reason lies solely in the plane of energy carriers.
Firstly, U.S. President Joe Biden once again stated that during his visit to Europe he would seek from the eurozone the imposition of an embargo on oil and gas supplies from Russia. But Europe is extremely dependent on Russian energy supplies, and it is completely unclear what to replace them with. The United States itself can export only insignificant volumes, which will not be enough to replace Russian supplies. And this is not counting the fact that fuel prices in the U.S., are much more expensive than in Russia. So if the U.S. manages to bend Europe, it will inevitably face both a real shortage of energy resources and an even greater increase in fuel prices. This is akin to the destruction of the European economy as such.
Secondly, the Russian Federation decided Wednesday to sell gas for rubles. However, only for unfriendly countries, to which the whole of Western Europe belongs. Of course, this caused a shock, since, for the entire post-war history, the prices of raw materials in the world were denominated exclusively in dollars. Roughly speaking, there was a unified pricing and settlement system. This is extremely convenient and allows you to bring prices to a certain uniform standard, which reduces the cost.
If prices are formed in different currencies, it will lead to chaos. The world is used to a single pricing system. And inevitably this will lead to an increase in raw material prices. However, there is really no talk of any paradigm shift. It's all about the reservation regarding unfriendly countries. It contains an opportunity to bypass this solution. It's just that the buyers will not be the countries of the European Union, but some others. For example, from North Africa or the Middle East. But the gas itself will still be supplied to Europe. Only at slightly higher prices.
So as a result, the cost of energy for Europe will still rise, which will have an extremely negative impact on the European economy. So it is not surprising that European currencies are losing their positions. And strangely enough, the decision of the Russian Federation allows the European Union to even go to the embargo since it will still buy gas through intermediaries, and not directly. But Europe will still have to pay dearly. Which is the main factor in the weakening of both the pound and the single European currency.
The EURUSD currency pair is moving within the deviation of the psychological level of 1.1000, showing speculative activity. Based on the price behavior, there is still a downward interest in the market, but the clearest signal for strengthening dollar positions will appear on the market only after the price is kept below 1.0960. Until then, there may be a flutter within the deviation of the 1.1000 level.
The GBPUSD currency pair, during the price rebound from the resistance level of 1.3300, returned to the area of 1.3180, where there was a slight stagnation. The subsequent increase in the volume of short positions is expected after the price is kept below 1.3170, which in the future may send the dollar towards 1.3120-1.3100. Otherwise, the stagnation may drag on.