Correlation between the euro and oil | 02 February 2021

02 February 2021, EUR/USD

EURUSD trading plan:

A bullish rally in the oil market will have a positive impact on the value of the euro, as the assets are correlated with each other. The market was well supported, thanks largely to the gradual tightening of supply under Saudi Arabia's unilateral output cuts of 1 million barrels a day. Those cuts, announced after the OPEC+ group's last monthly meeting, came into force as of Monday, but have already been instrumental in accelerating the decline of world crude stocks over the last month. OPEC+ group had stuck to its quotas, in aggregate, almost perfectly, although non-OPEC members' output ran slightly ahead of target.

Investment idea: Buy 1.2059 and take profit 1.2150.

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David Johnson
Analyst of «FreshForex» company
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