The $EURUSD pair declined sharply on Friday as investors continued to worry about the ongoing tensions between Western countries and Russia.
pair declined sharply as geopolitical concerns remained. The main concern is that Russia seems committed to invading Ukraine in the coming weeks. The country has already mobilized thousands of troops near the Ukrainian border.
There are several risks to this invasion. First, it could affect the overall European as the prices of natural gas jump since Russia is the biggest supplier in the region.and gas prices rise. Indeed, the price of Brent and West Texas Intermediate have risen to $95 and $93, respectively. Finally, there are risks that many European companies will struggle if Western countries move forward and impose sanctions on Russia.
The next key catalyst for the EUR/USD price will be the upcoming speech by Christine Lagarde on monetary policy. The ECB chair will deliver the speech on Monday and possibly talk about the actions that the bank will take later this year. Analysts expect that the bank will start ending its asset purchases program in the second or third quarters and then implement about two rate hikes this year. In her recent speech, Lagarde reaffirmed that the bank’s future rate hikes will be gradual as it tries to reduce shocks in the economy.
The other key movers for the pair will be the upcoming American retail sales numbers scheduled for Wednesday. Analysts expect the data to show that sales held steady in January even as inflation remained at elevated levels.The pair declined to a low of 1.1330, which was the lowest level since February 3rd. The price was about 1.45% below the highest level last week. It also moved below the key support level that is shown in red.
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