TRADE ALERT: EUR/ZAR IDEA: SELL (GO SHORT) - Would you BUY or SELL and WHY? PRICE ACTION: (BREAKOUT of an Inverse Cup and Handle) TIME FRAME: DAILY FUNDAMENTALS: Some policymakers at the ECB (European Central Bank) have said the situation in Ukraine could cause the ECB to slow its exit from stimulus measures.
Then we have Russian forces which have seized Europe’s biggest nuclear power plant.
Almost, a week later and electricity and fuel prices in Europe soared.
This then led to the Eurozone’s inflation level hitting a record high of 5.8% last month.
Strategists also worry that with the rising energy and gas prices, this will hit Europe’s economic growth prospects.
And so, with the escalating Ukraine-Russia conflict, there is a domino effect on Europe, where the euro continues to fall against major currencies.
For one, the euro slid to its lowest price level in 21 months, against Britain’s pound.
It also dropped to a seven-year low against the Swiss franc.
We also saw the euro drop to its lowest level against the US dollar in 21 months as well as the South African rand. when the euro falls against them, the rand tends to strengthen as I showed you in the chart above. DO YOU AGREE with the analysis?
Well considered - highly likely - but inflation could also hit the rand due to fuel and food costs. It’s currently being outweighed by the euro but they could both stabilise in each others inability to strengthen. Gold has also stabilised for now which has reduced the rate of the rands increase. Overall I agree just have to watch out with this one