Euro Tanks as Ukraine Tensions Boosts US Dollar. Will EUR/USD Go Lower?

Euro, EUR/USD, US Dollar, GOLD, CRUDE OIL, UKRAINE - Talking Points

• The Euro faces geo-political and interest rate headwinds
• APAC equities go south while gold and energy go north
• Safe haven status lifts US Dollar, will EUR/USD scope new lows?

Treasuries whipsawed on Friday as impending Fed tightening saw the 10-year note trade at a yield of 2.06% before spiralling below 1.92% on escalating tension in the Ukraine. It has been steady near 1.95% in Asia today, which is where it closed on Wednesday.

In general, risk assets were sold off and safe haven assets were bought on Friday after the White House announced that a Russian invasion of the Ukraine could happen at any time.

APAC equities followed Wall Street’s lead lower today, with the exception of Australia’s ASX 200, that was slightly positive. Japan’s Nikkei 225 was the largest underperformer, down over 2%.

The run to safe havens also saw gold roar higher, making a peak of 1865 on Friday. It has held slightly above 1850 in the Asian session. Silver also benefitted from the run to precious metals. Both have been steady today while industrial metals are noticeably lower.

All energy markets are trading higher and WTI crude oil hit a new peak of US$ 94.94 bbl. The highest since September 2014.

With all the brinkmanship around the Ukraine border, the supply of energy via the Nord Stream 2 pipeline appears to have been pushed further into the future.

Previously there had been a possibility of the pipeline opening in September this year for Russia start to export gas to Europe using the new pipe. Now there is no date being mentioned.

Later today, European Central Bank President Christine Lagarde will be speaking in front parliament regarding the ECB’s annual report. Then St. Louis Fed President James Bullard will be speaking with CNBC.

EUR/USD Technical Analysis

EUR/USD took out stops above a previous high on Thursday before collapsing on Friday.

That new high of 1.14949 may offer resistance as well as the pivot points at 1.13751, 1.13830, 1.13865, 1.14830, 1.1533 and 1.15245.

On the move lower it crashed through several pivot points before pausing just above a cluster of short and medium term simple moving averages (SMA). Those SMAs being the 14, 21 and 55-day.

Further below, there are potential pivot point support levels at 1.12738, 1.12633, 1.12347 and 1.12219. Possible support may also lie at the January low of 1.11215.

Chart created in TradingView

--- Written by Daniel McCarthy, Strategist for DailyFX.com

To contact Daniel, use the comments section below or @DanMcCathyFX on Twitter