Euro Gives Wild Ride for the Week

The Euro has been all over the place during the course of the trading week, slicing through the recent lows before turning around and bouncing. All things being equal, this is a market that I think continues to see a lot of volatility due to the fact that we have Russian troops in Ukraine, and of course there are a lot of concerns about the potential flaring up of that conflict of something bigger. That being said, it looks like traders are starting to come to grips with the fact that a larger protracted war is less likely.

EUR/USD Video 28.02.22

Looking at this chart, the 1.12 level is an area of support that you need to pay close attention to, as it has been important multiple times. If we were to actually close down below there, it probably opens up the possibility of a bigger move lower. On the other hand, if we can turn around and rally, it is more likely than not that we will see a significant amount of resistance near the top of the candlestick, and most certainly near the 1.15 handle above that has been so resistive in the past.

All things been equal, this will be the epicenter of Forex traders when it comes to all things Ukraine, so with this being the case you need to be very cautious with headline noise looking likely to be a major issue for the foreseeable future. Because of this, you need to be cautious with your position size, but I still favor the downside more than anything else at this point, not only due to the war, but the fact that we have the interest rate differential favoring the greenback anyways.

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