Euro holds steady at 1.10

EUR/USD is calm, trading on both sides of the 1.1000 level. In the European session, the currency is at 1.0988.

Roubles only, please

The euro continues to trade in choppy waters, unable to maintain any momentum due to the uncertainties over the war in Ukraine. Russian President Putin through a monkey wrench into the mix on Wednesday, when he announced that payments for Russian natural gas by “unfriendly nations” would have to be paid in Russian roubles. This appears to be an illegal move by Putin, but then again, he does hold the cards when it comes to supplying the energy needs of Western Europe. The crafty move by Putin, which has shaken up the energy markets, is another headwind for the euro to contend with.

The surge in global inflation has seen the major central banks respond with tighter policy, with the notable exception of the European Central Bank. Earlier this week, ECB President Lagarde acknowledged that the Fed and ECB were moving out of sync, a clear sign that Lagarde does not intend to change the Bank’s dovish stance, even though inflation continues to accelerate in the eurozone. Lagarde noted that Europe was more exposed to the war in Ukraine than the US, due to geographical proximity, and the war will have very different effects on the US and on the eurozone, which required different monetary policies.

As expected, German PMIs slowed in February. Manufacturing PMI dropped from 58.4 to 57.6, and Services PMI fell from 55.8 to 55.0 points. Investors didn’t seem all that concerned, as the readings managed to beat the forecasts. It was a similar story for the eurozone PMIs, as the manufacturing and services sectors continue to show growth.

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EUR/USD Technical

  • 1.0923 is the first line of support, followed by 1.0794
  • There is resistance at 1.1030, followed by 1.1159

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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