EUR/USD dips below $1.38

Having popped its head above the $1.39 level at the tail end of last week, EUR/USD has found itself pulled back.

Once again skirmishes inside Ukraine, where pro-Russian dissidents have attacked government facilities, have triggered a war of words between Russia and the US. After the US sent one of its war ships to the Black Sea, it has subsequently been subjected to several close flybys from a Russian Su-24 Jet. All of this, at the moment, is just grandstanding but could easily lead to further flare-ups between the two super powers. Although this has not been instigated by Europe, it is the euro that is suffering as a consequence.

This morning has also seen the release of the latest ZEW German economic sentiment figures which have fallen from 46.6 to 43.2, much worse than the 46.3 expected. This survey of German institutional investors and analysts shows the recent events surrounding the Ukraine have dented optimism in Germany.

As previously mentioned by David Madden, the violence in Ukraine has contributed to the fall in EUR/USD. Now that we have reached the 200-hour moving average and the relative strength index has dipped into oversold territory, we may see a little more support appear.

Spot FX EUR/USD chart

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.

Find articles by analysts