EUR/USD analysis the impact of Russia energy exports to Eurozone
With the escalating conflict between Russia and Ukraine, we could see more sanctions from the EU on Russia but Russia supplies a major portion of Euro zones energy imports. Any restrictions or price rises, could have a major impact on the EU economy and of course the Euro…
This week Germany halted the process of certifying the Nord Stream 2 natural gas pipeline. Putin's associate, Dmitry Medvedev responded to German Chancellor Olaf Scholz's tweeting:
“German Chancellor Olaf Scholz has issued an order to halt the process of certifying the Nord Stream 2 gas pipeline. Well. Welcome to the brave new world where Europeans are very soon going to pay €2.000 for 1.000 cubic meters of natural gas! (Dmitry Medvedev Deputy Chairman of the Security Council of Russia(@MedvedevRussiaE)
The above Tweet was before the Russian military moved against Ukraine. More sanctions on Russia from the EU could follow and there is of course the risk of Russian retaliation. Russia exports more to the EU than the EU does to Russia. The major exports are oil and gas:
In terms of EU natural gas imports Russia’s accounts for around 40% according to Eurostat data. High energy costs are already a problem in the EU and the potential for higher prices or shortages could cause a spike in inflation and impact on economic growth. This scenario could pressure the euro lower which is already happening on both daily and weekly charts.
In terms of the technicals on the daily chart there is resistance at 1.1330 then 1.400 which are also levels on the weekly chart, with a support level on the weekly chart at 1.0800.
Not investment advice. Past performance does not guarantee or predict future performance.
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