- EUR/USD lost 0.81% on the day, amid Russia’s offensive on Ukraine.
- Conflict issues between Ukraine and Russia dampened the mood of market players.
- EUR/USD Technical Outlook: Neutral bias to the downside, although a daily close below 1.1200 could exacerbate a move towards 1.1100.
The EUR is falling during the American session, although recovering from daily lows at 1.1106, and is recovering slightly as the session progresses, amid a renewed upbeat mood in the market, reflected in the equity indices of USA with profits. At the time of writing this article, the EUR/USD it trades at 1.1207.
Meanwhile, US Treasury yields cut earlier losses, with the US 10-year Treasury yield unchanged at 1,970%, while the dollar remains offered, with the index US Dollar up 0.96%, currently at 97.12, down from 97.73 level, last seen in Jul 2021.
For the time being, market sentiment improved. However, problems persist in the conflict between Ukraine and Russia. In the Asian session, Russian President Vladimir Putin announced that a special military operation was underway in Ukraine. Russia’s operation deployed weapons-laden bombers, special forces and launched missiles at Ukrainian command centers.
Western and NATO countries condemned Russia’s attack on Ukraine and will impose another round of sanctions, more forceful and damaging than the previous ones. Some of the sanctions we have imposed are: freezing assets in the EU and blocking Russian banks’ access to EU financial markets, while the UK Prime Minister is pushing for Russia to expel the SWIFT payment system .
Regarding macroeconomic data, the EU economic agenda included speakers from the ECB. The ECB’s Stoumaras mentioned that the APP would last until the end of 2022, while Holzman commented that the Ukraine conflict would delay the end of QE. Regarding inflation, ECB Schnabel said it is higher than expected and widening, but stressed that it would remain below 2% for the year.
On the other hand, US initial jobless claims for the week ending February 19 rose to 233,000, down from 235,000 forecast, while Q4 PCE prices rose 6.3% qoq. , below estimates of 6.4%.
Therefore, the EUR/USD pair would still be subject to market sentiment. If tensions ease, EUR/USD is likely to print another push towards the 1.1300 area. By comparison, a further rally would see another attempt at the 1.1100 level.
EUR/USD Price Forecast: Technical Outlook
EUR/USD is biased to the downside, as shown by the daily moving averages (DMAs) above the exchange rate. However, the sudden jump in the pair, attributed to the ECB’s perceived aggressive tone in its monetary policy in February, caused a rally to 1.1400. From a technical perspective, EUR/USD is neutral to the downside.
On the downside, the first support for the EUR/USD would be 1.1200. A breach of the latter would expose last year’s Nov 24 daily low at 1.1186, followed by Feb 24 daily low at 1.1106.
Additional technical levels
Source: Fx Street