CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved.

EUR/USD may target 2022 low as US readies new round of Russian sanctions

The euro has made progress from its March low, but upside looks limited; Europe may suffer more fallout from war as the US readies more sanctions and EUR/USD may threaten the 2022 low if prices break below flag support.

The euro is well off its March low versus the US dollar, but upside movement has stalled, and bulls do not appear anxious to resume buying in the short term. The conflict in Ukraine continues to rage on, and the fight for Mariupol is under close watch.

Meanwhile, the United States is reportedly readying another package of Russian sanctions. Those sanctions, while aimed at Russia, have spillover effects on the global economy. Unfortunately for the euro, Europe is one of the largest recipients of those negative effects.

Bank of France Governor Francois Villeroy, on Tuesday, said the war in Ukraine would drag on growth in the eurozone. The hit to Europe’s economy will likely only worsen with time unless Ukraine and Russia negotiate a peace, which appears unlikely at the current time. Despite the disarray, European Central Bank (ECB) rate hike bets have firmed up recently, according to overnight index swap pricing.

Still, the ECB faces a highly uncertain outlook amid the conflict, and extremely volatile energy prices are only complicating matters. Meanwhile, the Federal Reserve has grown increasingly hawkish. The Fed is expected to deliver a 50-basis point rate hike at its May meeting, putting the US central bank well ahead of its European counterpart. That bodes poorly for EUR/USD. Given the current perspective, the Euro is likely to remain depressed versus the US dollar and may even head lower yet. The only tangible reprieve in sight is for peace in Ukraine.

EUR/USD technical forecast

EUR/USD is struggling below the falling 20-day Simple Moving Average (SMA). Prices are also trading near the bottom of a Bear Flag pattern, which threatens more losses if support breaks. A breakdown may see the 2022 low at 1.0806 shift into focus, although an intraday move earlier this week found support at the 23.6% Fibonacci retracement level, which could stem losses.

EUR/USD daily chart

Follow Thomas Westwater on Twitter @FxWestwater

This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. This information Advice given in this article is general in nature and is not intended to influence any person’s decisions about investing or financial products. ​

The material on this page does not contain a record of IG’s trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG 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.


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. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.

Start trading forex today

Find opportunity on the world’s most-traded – and most-volatile – financial market

  • Trade spreads from just 0.6 points on EUR/USD
  • Analyse with clear, fast charts
  • Speculate wherever you are with our intuitive mobile apps

See an FX opportunity?

Try a risk-free trade in your demo account, and see whether you’re onto something.

  • Log in to your demo
  • Take your position
  • See whether your hunch pays off

See an FX opportunity?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Get spreads from just 0.6 points on popular pairs
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See an FX opportunity?

Don’t miss your chance. Log in to take your position.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.