The euro has been rapidly rising for the last two days. Some analysts suppose that such a surge could be somehow explained by Russia’s intention to sell gas in rubles. The decision should have come into force on Apr. 1.
However, on Mar. 29, the press secretary of Russia’s president said that the country would not immediately demand that buyers pay for its gas exports in rubles since it was a complicated and time-consuming process. The fact is that on Mar. 31, the government will consider the bill.
Nevertheless, Russia remains stuck to its stance. It will stop supplying gas to the countries that refuse to pay in rubles. In other words, Russia will still switch to payments in its national currency, though a bit later. Such news could hardly boost the euro.
In addition, just after Vladimir Putin announced his intention to accept payments in rubles, the Russian currency began gaining in value and almost returned to the levels recorded before Feb. 24. Otherwise, the ruble should have been falling. In addition, the pound sterling, which is closely connected to the euro, is almost stagnant.
In other words, the unpredicted jump in the single currency could be explained by the high speculative activity spurred by the gas payment issue. Now, all the markets are showing mixed trading. It is tough to predict price direction under the existing conditions. Nevertheless, given the euro’s speculative surge, the currency may slump soon.
Since the beginning of the week, the euro/dollar pair has appreciated by more than 200 pips. The price hit the upper limit of the resistance area of 1.1120/1.1180, retaining its upward momentum. On the four-hour chart, the RSI technical indicator is moving in the overbought area without crossing line 70.
In the same period, the Alligator indicator is signaling an uptrend. The moving averages show an upward direction. There is an intersection of the moving averages last seen long ago on the daily chart. This fact points to a slowdown in the mid-term downtrend caused by correction.
On the daily chart, we see a corrective movement from the support level of 1.0800 within the downtrend structure. At the moment, the general trend remains intact.
Outlook
At present, the resistance area of 1.1120/1.1180 is still attracting sellers’ attention. This may result in fewer long positions and a slower upward movement. If the predictions come true, the price will drop, thus allowing the US dollar to recoup some of its positions.
According to the alternative scenario, the correction may become longer. If the euro consolidates above 1.1200 on the four-hour chart, it will have every chance to climb higher.
In terms of the complex indicator analysis, technical indicators signal buy opportunities in the short-term and intraday periods amid a rapid rise in the euro. In the mid-term period, technical indicators are providing mixed signals.