General analysis GBPUSD, EURUSD, NZDUSD, AUDUSD, USDCAD, XAUUSD, Brent, WTI for 12.10.2021
Today the price movement in the forex market is limited to a narrow range. The energy crisis, triggered by rising natural gas and coal prices, has formed significant risks for the world economy. The rise in energy prices has increased price pressure in the U.S. and the European Union. The cost of producing consumer goods is rising along with energy prices, which is the most significant risk as it affects personal spending and limits economic activity in the manufacturing sector. A worsening energy crisis could increase inflation, weakening economic growth and force major central banks to rethink their monetary policy plans.
The trading volume of EUR/USD has significantly reduced as market participants have shifted their attention to commodities and currencies with a high beta coefficient. The pair is still trading near local lows. In the short term, further dynamics will depend on comments by Fed officials on the situation in the U.S. labor market.
The British pound on Monday once again failed to break through the strong resistance level of 1.3650. GBP/USD is in the upward trend correction stage. Tomorrow's release of UK employment statistics may have a significant impact on the pair.
AUD/USD and NZD/USD are traditionally rising due to the rising risk appetite among market participants. Canada is having an official Thanksgiving holiday today. USD/CAD movement is minimal despite the rise in oil prices.
Brent and WTI on Monday hit new highs since October 2018. Oil is strengthening amid rising demand as an alternative to expensive gas and coal. At the moment, the energy crisis is not only affecting Europe and the United States. China has increased coal production to provide power to industry, and some states in India are experiencing systematically scheduled blackouts due to energy shortages.
XAU/USD is consolidating near the resistance level of 1750. Gold's trading volume remains low as major investors have shifted their attention to energy commodities, ignoring the metals market as a risk diversification tool.