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EUR/USD renews 2022 low near 1.1000 as Russia-Ukraine crisis worsen ahead of US NFP

  • EUR/USD drops to the fresh low since late May 2020 amid intense risk-aversion.
  • Russian attacks on Ukrainian nuclear plant breaks trust in Kyiv-Moscow peace talks.
  • Fed’s Powell sounds hawkish, ECB Meeting Accounts highlights the importance of faster policy normalization.
  • German trade numbers, Eurozone Retail Sales may entertain traders but US NFP, risk catalysts are the key to clear directions.

EUR/USD licks its wounds around 1.1030, after refreshing the 22-month low to 1.1010 during early Friday morning in Europe.

In doing so, the major currency pair declines for the fourth consecutive day, also braces for the four-week downtrend, as the risk-aversion wave favors the US dollar bulls.

Russia’s shelling of the Ukrainian nuclear power plant in Zaporizhzhia, one of the largest in Europe, provides the latest blow to the market sentiment. Even if the radiation fears were turned down and the fire-safety team took control of the matters, Moscow’s recent actions pour cold water on the Russia-Ukraine peace talks that agreed on the safe passage of Kyiv’s civilians the previous day. On the same line were headlines from the UK Times suggesting that Ukraine’s President Volodymyr Zelensky survives three assassination attempts in days.

Moving on, Fed Chair Jerome Powell reiterated his support for a 0.25% rate hike, also showed readiness for a 0.50% rate-lift if needed in the March meeting, during the second round testimony the previous day. While portraying the market implications from Powell’s comments, CME’s FedWatch Tool marks around 89% odds favoring the same rate-lift in the next month’s Fed meeting.

Powell’s upbeat comments couldn’t find support from the US data but highlight today’s US US jobs report for February. That said, US ISM Services PMI eased for the third consecutive month in its latest release but the second-tier job data and Factory Orders came in positive on Thursday.

At home, European Central Bank monetary policy meeting accounts mentioned,” "The main risk was no longer of tightening monetary policy too early but too late."

Against this backdrop, S&P 500 Futures drop around 1.0% on a day whereas the US 10-year Treasury yields mark near six pips of a downside to 1.78% by the press time. Further, the US Dollar Index (DXY) eases after refreshing the 2022 peak while WTI crude oil also consolidates daily gains near $110.00 after initially rising to $112.81.

Moving on, geopolitical headlines will keep the driver’s seat while German trade numbers and Eurozone Retail Sales for January may provide additional hints ahead of the US Nonfarm Payrolls, expected 400K versus 467K prior.

Technical analysis

A three-week-old downward sloping trend line restricts short-term EUR/USD moves between 1.1165 and 1.0980.

Additional important levels 

Overview
Today last price1.1039
Today Daily Change-0.0024
Today Daily Change %-0.22%
Today daily open1.1063
 
Trends
Daily SMA201.1309
Daily SMA501.1317
Daily SMA1001.1367
Daily SMA2001.1598
 
Levels
Previous Daily High1.1129
Previous Daily Low1.1034
Previous Weekly High1.1391
Previous Weekly Low1.1106
Previous Monthly High1.1495
Previous Monthly Low1.1106
Daily Fibonacci 38.2%1.107
Daily Fibonacci 61.8%1.1093
Daily Pivot Point S11.1021
Daily Pivot Point S21.098
Daily Pivot Point S31.0926
Daily Pivot Point R11.1117
Daily Pivot Point R21.1171
Daily Pivot Point R31.1213

Author

Anil Panchal

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

More from Anil Panchal
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