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EUR/USD and GBP/USD remain under pressure but EUR/GBP stabilises


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EUR/USD and GBP/USD slide amid ongoing war in Ukraine but EUR/GBP stabilises as sterling weakness dominates.

 
 

EUR/USD continues its slide in wake of geopolitical tensions

EUR/USD so far dropped to $1.0806, close to the February and May 2020 lows at $107.78 to $107.67, amid the ongoing war in Ukraine and surging commodity prices which raise the prospect of slowing growth and strong inflation.

Further down the April 2020 low can be seen at $107.27 and the March 2020 low at $106.38.

Minor resistance sits between the November 2019 low at $1.1003 and the April 2020 low at $1.1019. Further resistance is found between the May 2019, January and February lows at $1.1106 to $1.1122.

EUR/USD chartSource: IT-Finance.com

EUR/GBP probes resistance as sterling weakens across the board

EUR/GBP is testing its £0.8277 to £0.8305 previous support, now resistance, area, which stretches as far back as December 2016, in the face of the crumbling British currency. It is the second-worst performing currency of the past week and month as it proves to be a major loser in the financial fallout caused by the war in Ukraine and tightening sanctions on Russia.

The rise above £0.8305 may lead to an extension towards the 55-day simple moving average (SMA) and two-month downtrend line at £0.8366 to £0.8374 being seen in the course of this week.

EUR/GBP chartSource: IT-Finance.com

GBP/USD trades in 1 ¼ year lows

The Pound Sterling has dropped by over -3% in as many weeks as the war in Ukraine and increasing sanctions on Russia have weighed on the currency with it now trading at levels last seen in November 2020.

The cross is nonetheless trying to at least short-term stabilise around the 200-week SMA at $1.3122. This underpinned GBP/USD back in December of last year.

Any short-term bounce is likely to encounter resistance at the $1.3163 December low. Further, more important, resistance comes in at the $1.3273 24 February low. Below today’s low at $1.3083 lies the minor psychological $1.30 mark.

GBP/USD chartSource: IT-Finance.com

Axel Rudolph | Market Analyst, London
08 March 2022
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