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Euro Hits a High Note Amid China Re-opening Hopes and OPEC+. Where to for EUR/USD?

Euro Hits a High Note Amid China Re-opening Hopes and OPEC+. Where to for EUR/USD?

Daniel McCarthy, Strategist


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Euro, EUR/USD, US Dollar, OPEC+, Crude Oil, China, Hang Seng, Metals - Talking Points

  • The Euro gained again today while the US Dollar collapsed
  • Positive US jobs data and OPEC+ steady production lifted prospects
  • The markets yearning for a China re-opening might be realised soon


EUR/USD made a 5-month high in the Asian session today as the US Dollar is again under pressure. Several macro developments have contributed to the buoyant, risk-on mood to start the week.

The market is still digesting US jobs data from Friday and the implications it may have for the Federal Reserve at their Federal Open Market Committee (FOMC) meeting come December 14th. The 263k change in non-farm payrolls for November was well above the 200k forecast.

Then, over the weekend, OPEC+ held a meeting and agreed not to deepen production cuts that have previously been announced.

Crude oil is consequently higher with the WTI futures trading as high as US$ 81.84 bbl while the Brent contract touched US$ 87.60 bbl. Both contracts have now pulled back lower going into the European day.

G-7 and EU restrictions on Russian oil exports come into effect today.

China eased travel restrictions across several major cities on Monday, raising hopes of a Covid-19 policy pivot for the world’s second-largest economy.

Hong Kong’s Hang Seng Index (HSI) led the way higher for Asian equity markets, adding more than 3%. Any market related to a re-opening has rallied hard.

Casino shares are generally up over 10% while base metals and related stocks are much higher. Iron ore and copper helped to boost the Aussie Dollar. The latter is seen as having significant exposure to Chinese growth prospects.

Gold also gained on the weaker US Dollar and broad demand for metals, trading above US$1,800 an ounce.

After a stack of European PMIs today, the US will see factory and durable goods orders data. The RBA will be deciding on cash rates tomorrow.

The full economic calendar can be viewed here.

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EUR/USD has moved above all period simple moving averages (SMA) and this might indicate that bullish momentum may continue to evolve.

Resistance could be at the breakpoint of 1.0638 or the previous peaks of 1.0615, 1.0774 and 1.0787.

On the downside, support may lie at the breakpoints of 1.0497 and 1.0482 or the prior lows of 1.0290 and 1.0223.


Chart created in TradingView

--- Written by Daniel McCarthy, Strategist for

Please contact Daniel via @DanMcCathyFX on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.