EURUSD: Ukraine In Focus
The weekend decision by US President Joe Biden’s administration to allow Ukrainian forces to use Western supplied long-range missiles to strike Russia, surprised markets and pushed the Ukraine war and its knock on impact for Europe, European indices and the Euro back to the forefront of traders minds this week.
Ukrainian forces didn’t wait long to take their opportunity to use these missiles as they fired on a military facility on a border region in Russia early yesterday morning, while the follow up response from President Putin on Tuesday was to update a nuclear doctrine allowing Russia to fire nuclear weapons in response to a massive conventional attack on its soil.
This escalation of the conflict has thrown a focus on EURUSD which has been under pressure since Donald Trump's Presidential election win on November 5th.
EURUSD – Rebound from Range Lows
Last week, EURUSD approached key support at 1.0449, these are 13 month lows marked by October 2023 extremes. This is important, as the 1.0440/50 region also marks the lowest EURUSD price activity since early December 2022, and the lower extremes of the current wide sideways range. This has seen declines slow, prompting a small recovery so far this week.
A range reflects more balanced themes between buyers and sellers, and can extend for an unknown period, until/if a breakout is seen. There is currently no indication of when any break will materialise, suggesting this activity could extend further, but it is important to be aware of these key levels while events in Ukraine are in focus.
Defence of support at the 1.0449 low may be key, as breaks could potentially lead to a more extended fall, depending on future market conditions. If the break does materialise the next important support is possibly marked by the 62% Fibonacci retracement of September 2022 lows to July 2023 high at 1.0203.
However, while the support at 1.0449 remains intact, it’s possible that upside reactions to the recent declines may materialise. To the upside, the first resistance may be represented by 1.0608, half of last week’s sell-off, then if this resistance was to give way, the next important focus could be 1.0773, which is the 38% retracement of latest declines.
It should be stressed, that breaks of support or resistance levels are based on hypothetical scenarios and while previous breaks of similar levels may have resulted in further price movements, past performance is not indicative of future results
The material provided here has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Whilst it is not subject to any prohibition on dealing ahead of the dissemination of investment research we will not seek to take any advantage before providing it to our clients.
Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.
Ukrainian forces didn’t wait long to take their opportunity to use these missiles as they fired on a military facility on a border region in Russia early yesterday morning, while the follow up response from President Putin on Tuesday was to update a nuclear doctrine allowing Russia to fire nuclear weapons in response to a massive conventional attack on its soil.
This escalation of the conflict has thrown a focus on EURUSD which has been under pressure since Donald Trump's Presidential election win on November 5th.
EURUSD – Rebound from Range Lows
Last week, EURUSD approached key support at 1.0449, these are 13 month lows marked by October 2023 extremes. This is important, as the 1.0440/50 region also marks the lowest EURUSD price activity since early December 2022, and the lower extremes of the current wide sideways range. This has seen declines slow, prompting a small recovery so far this week.
A range reflects more balanced themes between buyers and sellers, and can extend for an unknown period, until/if a breakout is seen. There is currently no indication of when any break will materialise, suggesting this activity could extend further, but it is important to be aware of these key levels while events in Ukraine are in focus.
Defence of support at the 1.0449 low may be key, as breaks could potentially lead to a more extended fall, depending on future market conditions. If the break does materialise the next important support is possibly marked by the 62% Fibonacci retracement of September 2022 lows to July 2023 high at 1.0203.
However, while the support at 1.0449 remains intact, it’s possible that upside reactions to the recent declines may materialise. To the upside, the first resistance may be represented by 1.0608, half of last week’s sell-off, then if this resistance was to give way, the next important focus could be 1.0773, which is the 38% retracement of latest declines.
It should be stressed, that breaks of support or resistance levels are based on hypothetical scenarios and while previous breaks of similar levels may have resulted in further price movements, past performance is not indicative of future results
The material provided here has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Whilst it is not subject to any prohibition on dealing ahead of the dissemination of investment research we will not seek to take any advantage before providing it to our clients.
Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.
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