EUR/USD Upbeat as Geopolitical Fears Ease

  • EURUSD
    (${instrument.percentChange}%)

Ukraine Developments

Tuesday's announcement from the Ministry of Defense of the Russian Federation that some troops had completed their tasks and were withdrawing from their position near Ukraine [1], eased fears of invasion and sparked optimism to the markets.

NATO Secretary General Jens Stoltenberg however, said shortly after, that "so far we have not seen any sign of de-escalation on the ground", noting though that "There are signs from Moscow that diplomacy should continue". [2]

US President Biden also said that "we have not yet verified that", in regards to the Russian troops withdrawal and warned that a Russian invasion "remains distinctly possible". [3]

Russian President Putin met with German Chancellor Olaf Scholz yesterday and during their joint press conference, he said that he does not want war in Europe, but noted that Russia's concerns have not been addressed. [4]

Trade the News: View our Economic Calendar

EUR/USD Reaction

Markets reacted positively to yesterday's news and sentiment remains constructive today, helping the pair extends its gains.

The common currency returns above the EMA100 and this can support further advance towards mid-1.1400s, although last week's 2022 highs don't seem that easy to reach yet.

Despite the upbeat mood, the Relative Strength index points to overbought conditions and this could create pressure back below the EMA100, but a catalyst will likely be needed for the weekly lows to be challenged (1.1279)

Caution is warranted, as markets react to a stream of news around Ukraine, while the economic calendar features some high profile events today from the US. Retail Sales and Industrial Product are due later today and we also expect the minutes form the Fed's last monetary policy decision.

Nikos Tzabouras

Senior Market Specialist

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

1

Retrieved 16 Feb 2022 https://eng.mil.ru/en/news_page/country/more.htm

2

Retrieved 16 Feb 2022 https://www.nato.int/cps/en/natohq/opinions_191832.htm

3

Retrieved 16 Feb 2022 https://www.whitehouse.gov/briefing-room/speeches-remarks/2022/02/15/remarks-by-president-biden-providing-an-update-on-russia-and-ukraine/

4

Retrieved 27 Jun 2022 https://www.youtube.com/watch

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