Euro pulls below 1.06 0 after another rejection at 1.0660 resistance area. Concerns about China and rising tensions in Ukraine dampened market optimism. EUR/USD Q1 2023 1.0892/109 Credit Suisse. . Euro fell in Thursday’s European trading session, failing to break the resistance of 1.0660/70 for the fourth consecutive attempt this week. The pair is trading within a 60-point horizontal range in a thin post-Christmas market. COVID-19 AND UKRAINE WAR REDUCE RISK APPETITE Investors’ moderate risk appetite in the first half of the week disappeared on Thursday, as reports of rising coronavirus infections in China raised doubts about the Asian country’s economic recovery. An explosion of , COVID-19 cases after Chinese authorities eased their Covid-19 policies is overwhelming the country’s health system. This has raised doubts about China’s opening up, which has forced the US, Italy and India to impose mandatory tests on arrivals from China so far. In addition, tensions are rising in Ukraine amid reports of heavy shelling in Kyiv and other cities after the Kremlin refused to accept Zelensky’s 10-point peace plan, adding negative pressure to the euro. In an economic calendar that lacks key data from the eurozone, weekly US jobless claims and crude oil inventories could provide another boost to currency markets. EUR/USD TARGET 1.0892/1.09 CREDIT SUISSE From a technical perspective, Credit Suisse analysts see more upside for the pair in the coming months: „We expect a strengthening in the first quarter of 2023, supported by large previous gaps. ( … ) We maintain our current bullish path of 1.0892/1.09 retracement of the 50% 2021/2022 decline and broken trend resistance from early 2017, and ideally at the top. wide variation.”

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