EUR/USD Forecast: Bulls side-lined amid persistent risk aversion

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.1206

Russian attacks on Ukraine continue, denting the market’s mood.
ECB President Christine Lagarde is due to speak later in the American session.
EUR/USD trades at around 1.1200, with its bearish potential intact.

The EUR/USD pair trades around the 1.1200 level, recovering from an intraday low of 1.1127 but lacking momentum. Safe-haven assets gapped higher at the weekly open, as the war in Eastern Europe sees no end. Russia keeps attacking Ukrainian cities, and multiple civilian casualties have been reported. Officers from both countries have met at the Ukraine-Belarus border to take part in peace talks. Nevertheless, the West has imposed multiple and severe financial sanctions on Russia over the weekend. Overall, markets remain in risk-off mode amid fears tensions will continue to escalate.

Market participants have been ignoring macroeconomic data these days, with nothing relevant coming out of Europe. The US, on the other hand, has published the January Goods Trade Balance, which posted a deficit of $-107.6 billion and Wholesale Inventories for the same month, up a modest 0.8%. ECB President Christine Lagarde will offer a speech later in the day.

EUR/USD short-term technical outlook

The EUR/USD pair hovers around Friday’s close, maintaining its bearish stance in the daily chart. The pair keeps developing below all of its moving averages, while technical indicators head firmly lower within negative levels, reflecting sellers’ strength.

The 4-hour chart shows that a bearish 20-SMA provided intraday resistance, as the pair retreated after testing it during London trading hours. The moving average remains far below the longer ones, a sign that bears retain control. Technical indicators recovered from their intraday lows but remain within negative levels. A steeper decline could be expected on a break below 1.1160, the immediate support level.

Support levels: 1.1160 1.1120 1.1075

Resistance levels: 1.1210 1.1260 1.1305

View Live Chart for the EUR/USD

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Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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