EUR/USD Forecast: Russia-Ukraine war put the world on its toes
EUR/USD Current Price: 1.1200
- Russia invaded Ukraine, triggering panic runs to safety among financial markets.
- Demand for the American dollar sent EUR/USD to a fresh 2022 low of 1.1105.
- EUR/USD trimmed part of its daily losses but has room to extend its slide.
The EUR/USD pair fell to 1.1105, its lowest since May 2020, as panic took over financial markets. The pair managed to bounce from the mentioned low, trading in the 1.1200 price zone as the day came to an end.
Russia staged a massive attack on Ukraine, invading the country. Multiple casualties have been reported as Moscow attempts to take over Kyiv. The rest of the world condemned the invasion and triggered various sanctions on Russia, but the crisis continues and it does not seem President Vladimir Putin will back out on its decision to take control of the European country.
The dollar soared on the back of risk aversion, accelerating its advance after Wall Street opened with substantial losses. US indexes bounced from their intraday lows but remain in the red, while sudden demand for government bonds sent yields sharply lower.
Market players are ignored macroeconomic figures, although US data surely help the greenback. The Q4 Gross Domestic Product was upwardly revised to 7% QoQ as expected, while Initial Jobless Claims for the week ended February 18 fell to 232K, better than anticipated.
On Friday, Germany will publish the second estimate of Q4 Gross Domestic Product, foreseen unchanged at -0.7% QoQ. The EU will release the February Economic Sentiment Indicator, while the US will release January Durable Goods Orders and the core PCE Price Index for the same month.
EUR/USD short-term technical outlook
The EUR/USD pair remains below the 1.1200 level, maintaining its bearish stance according to technical readings in the daily chart. The pair has plummeted below all of its moving averages, while technical indicators head south almost vertically, holding near oversold readings.
In the 4-hour chart, technical indicators have started correcting extreme oversold readings but are short of suggesting that the pair has reached a bottom, as they lack bullish strength. At the same time, the 20 SMA has turned south below the longer ones, all of them far above the current level. The pair has room to test the critical 1.1000 threshold on renewed selling pressure below the 1.1100 figure.
Support levels: 1.1145 1.1100 1.1060
Resistance levels: 1.1210 1.1260 1.1305
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Author
Valeria Bednarik
FXStreet
Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.
