Jump to content

Euro Sinks as Russia Attacks Ukraine and Markets Sour. Will EUR/USD Set New Lows?


Recommended Posts

EURO, EUR/USD, UKRAINE, RUSSIA, ECB – TECHNICAL OUTLOOK

  • Euro tumbles as Russia attacks Ukraine, geopolitical tensions simmer
  • All eyes are on Western response as 2022 ECB rate hike bets dwindle
  • EUR/USD still remains in a key range, will breakout lower follow?
image.jpeg

The Euro tumbled as Russia’s President Vladimir Putin commenced a ‘military operation’ in Ukraine during Thursday’s Asia-Pacific session. He added that he was ‘not planning’ on occupying the nation. EUR/USD one-week implied volatility jumped to the highest since early December 2021. It was the worst 4-hour drop since the beginning of this year and puts the single currency at risk in an uncertain environment.

Ukraine called Russia’s aggression a ‘full-scale invasion’ and US President Joe Biden said that the country will impose ‘severe sanctions’ on Russia in the coming hours. UK Prime Minister Boris Johnson said that the country and its allies will respond decisively. According to Bloomberg, Russia confirmed that it was targeting Ukrainian military facilities. Reports crossed the wires of missiles attacking Kyiv.

The unfolding crisis seeped into global risk appetite. On the 15-minute chart below, the Euro can be seen falling alongside S&P 500 futures as well as the sentiment-linked Australian Dollar. Gold prices soared to the highest since January 2021. This is as futures tracking the tech-heavy Nasdaq 100 declined and approached levels last seen in May 2021. The stock index is heading for the worst month since 2008.

Aside from proximity risks, the Euro may also be vulnerable to fading hawkish European Central Bank (ECB) policy expectations. DAX 40 futures sank over 4% during APAC trade, with the German benchmark stock index heading for the worst daily performance since late November. VIX futures jumped to 33.70, the highest since November 2020 as market fear settled in.

The situation continues to unfold rapidly, and all eyes are on the Western response. Ukraine is also complicating the Federal Reserve’s expected monetary tightening effort as local inflation runs at a 40-year high. US PCE data – the Fed’s favored inflation measure – is due on Friday. Crude oil prices also surged, with WTI touching US$ 97 after being at 92 by Wednesday’s close. The latter risks bolstering inflation estimates further.

MARKET REACTION TO UKRAINE CRISIS 15-MINUTE CHART

Euro Sinks as Russia Attacks Ukraine and Markets Sour. Will EUR/USD Set New Lows?

Chart Created in TradingView

EURO TECHNICAL ANALYSIS

EUR/USD is nearing the key 1.1122 – 1.1186 support zone following the developing Ukraine crisis. This follows a rejection of the 1.1453 – 1.1495 resistance zone after a Doji candlestick pattern formed. As I mentioned last week, a bearish chart formation is brewing in a majors-based Euro index. That could hint at downtrend resumption. For the time being, the single currency remains in a consolidative state until a breakout is found. Clearing support exposes the 61.8% Fibonacci extension at 1.1048.

 

EUR/USD DAILY CHART

Euro Sinks as Russia Attacks Ukraine and Markets Sour. Will EUR/USD Set New Lows?

Chart Created in TradingView

--- Written by Daniel Dubrovsky, Strategist for DailyFX.com. 24th Feb 2022

  • Like 1
Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • image.png

  • Posts

    • In a world where gaming is one of the most used forms of relaxation, a good number of projects have evolved to give gamers an immersive experience alongside passive earning opportunities to earn from. Through time, there has been a plethora of crypto gaming projects. With AxieInfinity being its progenitor, we have witnessed expansive growth with how certain projects have extended its tentacles. Currently, one of the projects that has caught my eye is $NADA. The project is one of the pioneer gaming models on the Hedera Blockchain Network. Primarily, it seeks to be used in blockchain based NFT mobile games where the latter and metaverses are interconnected seamlessly. Most of the games it is associated with have considerable pedigree in the global market. In a bid to let users earn seamlessly, NADA looks to allow players earn tokens through game play thus projecting gamefi. In the exactitude of real world use-cases, the token can be used for purchasing in game items, et al. Deducing from all of its features, it is incredibly worthy to note that the token has good use cases and tokenomics. In recognition of this, reliable platforms like Bitget have expressed intent to list it along a significant number of activities to earn from, depositing the token is even opened on there already. Conclusively, I'll love to hear your thoughts on this new model? 
    • Blockchain and gaming complement each other nicely. Their fusion has enabled real rewards for gamers, something that traditional games don’t offer. What’s more, BlockchainxGaming effectively manages the ownership and transaction history of game characters, items, etc, enforces property rights, promotes transparency, stability, reliability and improves fun. As blockchain and NFT-based games continue to drive the game market's growth, the hunger to play more and earn more deepens. Nada Protocol is proposing a blockchain technology and ecosystem with customized structure that will fuse with the global mobile game market and NFT blockchain game market, satisfying game players’ cravings with a more immersive mobile game experience where they can own and trade the items they earn from the game. NADA focus seems to be centered around creating a fun blockchain gaming ecosystem that adds the value of economic activity to the pleasure of gameplay. One of the most significant of its core features is a buzzing marketplace where users can conveniently find the items they want and trade them with other users. Much of the activities in Nada marketplace is controlled by NADA token, a reward-type token built on the Hedera network, and currently building up liquidity to list on Bitget. What’s your thought on this fast-growing game and its chances to carve a niche for itself in the competitive gaming world?
    • Thanks very much, @KoketsoIG. I hadn't discovered the drop down menus - it all makes much more sense now! It's odd about the E1 contracts - it must be a new change, because I'm in the UK and I currently hold some of the E1 positions that I opened a few weeks ago. Anyway, at least now I understand what's going on. I'll try not to bother you with too many questions as I get used to the new platform! Best wishes, Cate
×
×
  • Create New...
us