EUR/USD: the euro develops a corrective decline
Current trend
The European currency shows a moderate decline against the US dollar during the Asian session, again testing 1.1000 for a breakdown. Demand for risky assets remains quite low at the beginning of this week, as the growing geopolitical tensions keep investors from opening new trading positions.
At the moment, Russian troops continue to conduct a special military operation on the territory of Ukraine, which causes a reaction from Western states regarding new restrictions. This week the EU is preparing to consider the introduction of a new, fifth package of sanctions against the Russian economy. Today, a meeting of representatives of the EU secretaries of defense and foreign affairs will be held in Brussels, where the main topic of the agenda will be the situation in Ukraine. EU High Representative for Foreign Affairs and Security Policy Josep Borrell will present a report on possible scenarios for further developments in the situation.
Among other things, the new measures may include the introduction of a moratorium on the import of Russian oil and gas, similar to the one currently in force in the United States. However, the position of European states on this matter is still extremely ambiguous. Given high energy prices, the withdrawal of Russian resources could trigger further price pressures. In particular, Germany, which fears for its energy security, opposes the embargo.
The macroeconomic statistics from Germany published today did not have a noticeable impact on the dynamics of the instrument. Thus, the Producer Price Index in February slowed down growth from 2.2% to 1.4%, which turned out to be worse than the market's expectations of an increase of 1.7%. On an annualized basis, industrial inflation accelerated from 25% to 25.9%, only slightly falling short of the expected 26.1%.
Support and resistance
Bollinger Bands on the daily chart reverse into the horizontal plane: the price range is narrowing, reflecting the mixed nature of trading in the short term. MACD reverses downwards, forming a new sell signal (the histogram is trying to settle below the signal line). Stochastic shows a more confident decline and is now rapidly approaching its lows, indicating the risks of euro oversold in the ultra-short term.
Resistance levels: 1.1051, 1.1100, 1.1150, 1.1185.
Support levels: 1.1000, 1.0957, 1.0900, 1.0860.
The European currency shows a moderate decline against the US dollar during the Asian session, again testing 1.1000 for a breakdown. Demand for risky assets remains quite low at the beginning of this week, as the growing geopolitical tensions keep investors from opening new trading positions.
At the moment, Russian troops continue to conduct a special military operation on the territory of Ukraine, which causes a reaction from Western states regarding new restrictions. This week the EU is preparing to consider the introduction of a new, fifth package of sanctions against the Russian economy. Today, a meeting of representatives of the EU secretaries of defense and foreign affairs will be held in Brussels, where the main topic of the agenda will be the situation in Ukraine. EU High Representative for Foreign Affairs and Security Policy Josep Borrell will present a report on possible scenarios for further developments in the situation.
Among other things, the new measures may include the introduction of a moratorium on the import of Russian oil and gas, similar to the one currently in force in the United States. However, the position of European states on this matter is still extremely ambiguous. Given high energy prices, the withdrawal of Russian resources could trigger further price pressures. In particular, Germany, which fears for its energy security, opposes the embargo.
The macroeconomic statistics from Germany published today did not have a noticeable impact on the dynamics of the instrument. Thus, the Producer Price Index in February slowed down growth from 2.2% to 1.4%, which turned out to be worse than the market's expectations of an increase of 1.7%. On an annualized basis, industrial inflation accelerated from 25% to 25.9%, only slightly falling short of the expected 26.1%.
Support and resistance
Bollinger Bands on the daily chart reverse into the horizontal plane: the price range is narrowing, reflecting the mixed nature of trading in the short term. MACD reverses downwards, forming a new sell signal (the histogram is trying to settle below the signal line). Stochastic shows a more confident decline and is now rapidly approaching its lows, indicating the risks of euro oversold in the ultra-short term.
Resistance levels: 1.1051, 1.1100, 1.1150, 1.1185.
Support levels: 1.1000, 1.0957, 1.0900, 1.0860.
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