EUR/USD sees a quick rebound towards 1.1050 amid easing Ukraine's nuclear fears

EUR/USD is on a quick retracement towards 1.1050, having hit fresh 2022 lows at 1.1010 in the last hours.

The main currency pair came under heavy selling pressure after news hit the wires that Europe’s largest nuclear power plant in Ukraine was attacked by Russia. The Zaporizhzhia Nuclear Power Plant is located a few kilometers from Enerhodar.

Markets started contemplating radiation risks after a fire was reported on Russia’s shelling. The risk sentiment was heavily hit, with the S&P 500 futures down 1.33% at one point while the US dollar index jumped to the highest levels since mid-2020 at 98.08. This led to the crashing of the EUR/USD to near the 1.1000 psychological levels.

Although the decline was quickly reversed on calming statements from the Ukraine authorities and the International Atomic Energy Agency (IAEA), suggesting that there was no change reported in radiation levels at the Zaporizhzhia nuclear power plant. The head of the Zaporizhzhia Regional State Administration said, “nuclear safety of the plant is ensured.”

The risk-off flows cooled off on these above statements, offering some relief to the major, as the safe-haven US dollar pared back gains while the S&P 500 futures recovered losses. At the time of writing, the pair is trading at 1.1038, down 0.23% on the day.

Looking ahead, the developments related to the Russia-Ukraine war will continue to remain as the main market driver, as traders eagerly await the US Nonfarm payrolls data for fresh USD valuations.

EUR/USD: Additional levels to consider