• EUR/USD corrects lower from peaks above 1.1100.
  • The dollar gathers some renewed traction on geopolitics.
  • EMU trade deficit widened to €27.2B in January.

The single currency gives away some gains and forces EUR/USD to abandon the area of recent tops past 1.1100 and revisits the 1.1030 region on Friday.

EUR/USD weaker on risk aversion

EUR/USD trades on the defensive for the first time this week and comes under some pressure after hitting new 2-week peaks around 1.1140 on Thursday.

The knee-jerk in the pair comes in response to renewed concerns in the geopolitical landscape and after Russia-Ukraine peace talks appear to have stalled in past hours.

The resumption of the risk aversion among traders is also seen in the demand for bonds in money markets on both sides of the Atlantic, with the German 10y bund extending the decline to the 0.35% area and its US peer flirting with the 2.15% region.

In the docket, trade balance figures in the broader Euroland showed the trade deficit clinched a new record at €27.2B during January.

Data across the pond includes the CB Leading Index, Existing Home Sales and speeches by FOMC’s T.Barkin, C.Evans and M.Bowman.

What to look for around EUR

The European currency meets some fresh selling bias at the end of the week and fades the recent uptick to the 1.1140 region, all amidst the fresh bout of risk aversion stemming from the deterioration of the geopolitical arena. Pockets of strength in the euro, in the meantime, should appear reinforced by the speculation of the start of the hiking cycle by the ECB at some point by year end, while higher German yields, elevated inflation, the decent pace of the economic recovery and auspicious results from key fundamentals in the region are also supportive of a firmer currency for the time being.

Key events in the euro area this week: EMU Balance of Trade (Friday).

Eminent issues on the back boiler: Asymmetric economic recovery post-pandemic in the euro area. Speculation of ECB tightening/tapering later in the year. Presidential elections in France in April. Impact of the geopolitical conflict in Ukraine.

EUR/USD levels to watch

So far, spot is retreating 0.48% at 1.1036 and faces the next up barrier at 1.1137 (weekly high Mar.17) followed by 1.1245 (55-day SMA) and finally 1.1294 (100-day SMA). On the other hand, a drop below 1.0977 (10-day SMA) would target 1.0900 (weekly low Mar.14) en route to 1.0805 (2022 low Mar.7).

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

AUD/USD fades recovery moves above 0.6700 ahead of RBA Bulletin, Australia Trade Balance

AUD/USD fades recovery moves above 0.6700 ahead of RBA Bulletin, Australia Trade Balance

AUD/USD struggles to defend the latest bullish impulse around 0.6725-30, after bouncing off a one-week low the previous day, as traders await updates/data from Australia during early Thursday.

AUD/USD News

EUR/USD grinds higher past 1.0500 with eyes on ECB President Lagarde

EUR/USD grinds higher past 1.0500 with eyes on ECB President Lagarde

EUR/USD struggles to defend the previous day’s corrective bounce around 1.0510-15 during Thursday’s Asian session. In doing so, the major currency pair portrays the market’s inaction amid a light calendar and mixed sentiment.

EUR/USD News

Gold eyes further upside on downbeat United States Treasury bond yields

Gold eyes further upside on downbeat United States Treasury bond yields

Gold price seesaws around $1,785, after posting the biggest daily gains in a week, as buyers seek more clues to approach the five-month top marked earlier in the week. The yellow metal’s latest run-up could be linked to the downbeat performance of the United States Treasury bond yields.

Gold News

Binance’s US arm eliminating trading fees for ETH means this for Ethereum price

Binance’s US arm eliminating trading fees for ETH means this for Ethereum price

Binance has managed to cement itself in the crypto space as a leader over the last couple of weeks. Following FTX’s collapse, the world’s biggest cryptocurrency exchange has been attempting to regain its customers’ trust and confidence.

Read more

What happens after the Fed reaches the terminal rate

What happens after the Fed reaches the terminal rate

The discrepancy starts to show. What will the Fed do? For now, the Fed is raising rates to stave off inflation, and are expected to level out at around 5.0%. 

Read more

Forex MAJORS

Cryptocurrencies

Signatures