During the Asian session, the euro was in free fall against the dollar. The situation with the EU, the war and sanctions on oil imports can be described as horrible situations. The decision to impose an embargo on Russian oil is destructive to the European economy. Failure to reach a political agreement is bad for the EU. The political harmonization of the representatives of the EU member states continues after the European Commission presented a new proposal at the end of last week on the introduction of an embargo on the import of oil from Russia by the end of this year. Hungary and the EU have said that progress has been made, but more time is needed for talks to continue today. Sentiment in the financial market is very bad, and that is in favor of the American currency. The euro is exchanged for 1.04275 dollars, weakening the common European currency by 0.81% since the beginning of trading tonight. We need a continuation of the current negative consolidation for the bearish option. Our next lower support target is 1.04000, and it is possible to see the euro at even lower levels on the chart. We need a new positive consolidation and a return of EURUSD above the 1.05000 level for the bullish option. After that, with further consolidation, we can expect a continued recovery. Today’s maximum for EURUSD was at 1.05768 level.
GBPUSD chart analysis
The pound continues to sink lower and lower. Today it formed a new lower low this year by falling to the 1.21650 level. We now have consolidation at this level and a smaller recovery by jumping above 1.22000 levels. Bearish pressure is huge and could break the pound even lower. Potential lower targets are 1.21500, then 1.21000 level. The new embargo on Russian energy and banks will lead to a new jump in prices and thus an increase in inflation. This scenario does not affect the British currency. We need a new positive consolidation and a return above 1.22600 levels for the bullish option. After that, we return to the previous consolidation zone of 1,22600-1.24000 levels. There are more and more chances that we will see this pair at 1,200,000 levels in the coming period.
Market overview
UK GDP Growth Slows In Q1
The economy of Great Britain unexpectedly slowed down in the first quarter; data published by the Office for National Statistics showed on Thursday.
Gross domestic product advanced 0.8% consecutively, slower than the 1.3% increase in the fourth quarter, and economists ’forecasts were +1.0%.
The trade deficit in goods and services rose to a record 5.3% of nominal GDP in the first quarter, largely reflecting a sharp rise in imports of goods.
GDP fell 0.1% in March after no growth in February. The biggest contribution to the decline was a drop in service production of 0.2 %.
The risk of a recession has risen with this report, although strong price pressures are likely to mean the BoE will further raise interest rates, said Paul Dales, an economist at Capital Economics.
The second ONS report showed that the goods deficit, excluding precious metals, increased by GBP 19.6 billion to GBP 62.2 billion in the first quarter, as imports of goods rose by 15.2% and exports fell by 0.3%.
