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

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