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The vast majority of retail client accounts lose money when trading CFDs.

You should consider whether you can afford to take the high risk of losing your money.

Important Notice - Fraud awareness
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The vast majority of retail client accounts lose money when trading CFDs.
Important Notice - Fraud awareness
Important Notice - Scam alert
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money.
Important Notice - Fraud awareness
Important Notice - Scam alert
The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider. You should consider whether you understand how CFDs / Spread betting work and whether you can afford to take the high risk of losing your money.
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EURGBP Finds Support To Move Higher

EURGBP has found support at a critical uptrend line and will look to economic data for further gains.

Tuesday will have ZEW economic confidence figures for Germany and the Eurozone. Wednesday will be the big day with inflation released for the UK and Europe. 

EURGBP – Daily Chart

october eurgbp chart

The EUR versus the GBP has found some buyers at the 0.8600 level and now awaits the data. 

In the UK, the new chancellor was trying to steady the ship after recent bond market turmoil, and the new Prime Minister remains under pressure. That adds a headwind to the Pound sterling in coming sessions. 

Jeremy Hunt announced he was scrapping “almost all” of the tax cuts announced by the government last month. Mr. Hunt said the planned cap on annual energy costs of £2,500 for a typical household would be scaled back. That will run until April when a new approach will be sought “that will cost the taxpayer significantly less than planned.” Another reversal was a penny cut in income tax due in April. The chancellor said the rate would remain at 20p “indefinitely until economic circumstances allow for it to be cut.” 

The British economy will release inflation on Wednesday with a forecast of 10%. Prices dipped last month to 9.9% from 10.1%, but a slight rise is expected again. Later that day will also release core inflation for the Eurozone. That is likely to rise from 4.3% to 4.8% and could spur rate hike talk for the European Central Bank. 

On Monday, Germany’s Economy Minister Robert Habeck said, “with fiscal policy in place, they can avoid a deep recession in Europe without fuelling inflation.” 

“After this winter, we can expect a decrease in gas prices in the world market,” he added. 

Europe is said to have enough gas for the winter, but forecasts say next year could be worse. Governments have successfully scrambled to restock underground natural gas reserves in preparation for the winter. This week, Germany reached a critical point by filling its gas reserves to 95% two weeks ahead of schedule. Gas stocks in the wider Eurozone are also at nearly 92%. 

But experts warn that European gas storage is only designed to last a few months, regardless of whether the winter is cold or mild. Between increasingly limited flows from Russia, no new projects coming online next year, and stiff competition from Asian markets, Europe’s energy crisis looks like it will worsen next year. 

“Most likely, all of the gas from underground storages will have been utilised by the end of the heating season in spring, and there are no significant potential additions visible in 2023 for European supplies,” said Tatiana Mitrova at Columbia University’s Energy Policy centre. 

“It seems to be nearly guaranteed next year will be worse,” she added. “I’m afraid it will be really tough next year.”

Last Updated: 18/10/2022

This market commentary and analysis has been prepared for ATFX by a third party for general information purposes only. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell as it does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should therefore seek independent advice before making any investment decisions. This information has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. We aim to establish and maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. The market data is derived from independent sources believed to be reliable, however we make no representation or warranty of its accuracy or completeness, and accept no responsibility for any consequence of its use by recipients. Reproduction of this information, in whole or in part, is not permitted.


 

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