EUR/USD Moves Away From Recent Lows

Key Insights

• EUR/USD tries to recover as markets calm down a bit
• Geopolitical tensions stay high; expect strong moves on any big news
• Markets may ignore economic news this week

Euro Attempts To Rebound Against U.S. Dollar

EUR/USD is currently trying to settle back above 1.1170 as the U.S. dollar pulls back after the strong rally, which was triggered by harsh sanctions on Russia.

The U.S. Dollar Index made an attempt to settle above the resistance at 97.45 but lost momentum and pulled back below the support level at 97.25. In case the U.S. Dollar Index manages to settle below this level, it will move towards the next support at 97, which will be bullish for EUR/USD.

Today, foreign exchange market traders will stay focused on the consequences of the harsh sanctions on Russia, which include sanctions on the country’s Central Bank. At this point, it is not clear how Russia could respond to such sanctions, although the country has already announced a temporary ban on securities sales for non-residents. In turn, this move may trigger a similar response from the West.

The U.S. dollar has moved away from yearly highs as traders hope that negotiations between Russia and Ukraine could bring some progress, but such progress is not guaranteed. In case of further escalation of the conflict, the American currency will likely get more support as traders would rush to safe-haven assets.

Technical Analysis

EUR/USD is testing the resistance level at 1.1170. If this test is successful, EUR/USD will move towards the next resistance level, which is located at 1.1200.

A move above 1.1200 will open the way to the test of the resistance at 1.1230. In case EUR/USD manages to settle above this level, it will head towards the resistance at 1.1270.

On the support side, a move below 1.1170 will push EUR/USD towards the support level at 1.1130. If EUR/USD declines below this level, it will head towards the next support at 1.1110. A successful test of the support at 1.1110 will open the way to the test of the support at 1.1070.

For a look at all of today’s economic events, check out our economic calendar.