- The euro gains momentum and becomes one of the best of the day.
- EUR/USD remains range bound below 1.1400.
- Focus remains on Russia/Ukraine and sanctions announcements.
The EUR/USD extended gains and climbed to 1.1366, posting a new high for the day, on a combination of some dollar weakness and a stronger euro. The pair then trimmed gains and fell finding support at 1.1336.
The dollar is moving in mixed territory, with traders closely watching the headlines on the situation in Ukraine. In recent hours, tensions eased somewhat, leading to a rebound in equity markets and a drop in the dollar.
The DXY loses 0.20% and remains in the range of the last few days. To the weakness of the dollar, was added in the last hours a strength of the euro, which is among the best performing currencies in the market. EUR/GBP rose more than 40 pips and EUR/CHF almost a hundred.
Good data, but the focus elsewhere
Tuesday’s economic data was Germany’s IFO survey, which showed higher-than-expected gains. The business climate index climbed to 98.9, from 96, and the expectations index to 99.2 from 95.8, exceeding the 96.1 expected.
European officials are discussing what to do about Russia’s advance in the Ukrainian regions. Germany announced that they will have to reassess the situation regarding the Nord Strem 2 network. The announcement of US sanctions is also expected in the next few hours.
The economic calendar shows ahead the release of the preliminary US Markit PMI for February, the S&P/Case-Shiller home price index for December, the Richmond Fed manufacturing index and the consumer confidence index for Conference Board. Additionally, Atlanta Fed President Raphael Bostic will engage in a conversation about the banking landscape.
EUR/USD in ranges
The pair continues to move sideways, having managed to hold above 1.1300. To the upside, it appears capped at 1.1400. As long as the price does not break out of this range in a confirmed way, there will be no clear signals.
In the very short term, the EUR/USD is trying to confirm itself above 1.1345 (4-hour 20 moving average), which if materialized would give the euro momentum.
Technical levels
Source: Fx Street
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