EURUSD reacts to Russian warning and partial mobilisation
The EURUSD has declined over the last 24 hours and is now between its lower blue and red bands. This channel denotes weakness as the Bollinger bands look to expand (black ellipses). The daily stochastic has rolled over and is heading towards 20. If it reaches and holds this level (blue arrow), bearish momentum will be present.
The currency pair weakened following an announcement by Russian President Putin of a partial mobilisation of troops, calling on 300,000 reservists. Recently, Russia has lost ground to the Ukrainian forces.
The Russian leader was confrontational in his communication, "I want to remind you that our country also has various means of destruction, and for separate components and more modern than those of NATO countries and when the territorial integrity of our country is threatened, to protect Russia and our people, we will certainly use all the means at our disposal."
He added, "It's not a bluff."
In response, the hourly chart shows a sharp decline to the S2 pivot, where it is currently trading. We note that the hourly stochastic remains in its lower quintile. The longer it keeps this position, the greater the likelihood of further decline.
However, if the S2 support holds and the EURUSD can show strength, the Fed meeting this evening adds a headwind. As such, overhead resistance will be compelling levels to monitor for reactions.
Russell Shor
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.
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