Dollar Gains, Euro Slumps On the Back of Rising Crude Prices

Dollar Index

Dollar Index is trading up 0.76% at 99.254

The U.S. dollar tracked higher while the euro slumped to a fresh low as soaring crude prices raised fears that the war in Ukraine will result in a stagflation shock, particularly to countries in Europe.

At 3:20 AM ET (0820 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.3% higher at 98.957, just off last week’s 22-month top of 99.220 on the back of strong employment data.

EUR/USD fell 0.5% to 1.0871, after earlier falling to its lowest level since May, and seemingly heading towards its 2020 trough of 1.0636.

Fight in Ukraine continues to intensify, with Russian troops closing in on Mykolaiv, a city of half a million people near Odessa.

This has resulted in the United States and Europe looking at bans on Russian crude imports in order to punish the Putin regime, prompting oil prices to leap to highs not seen since 2008.

This puts the spotlight on the European Central Bank, which meets on Thursday, as the policymakers will face a complicated picture of rising prices but also a severe threat to future growth.

It was not only against the dollar that the euro weakens, the single currency also briefly sank below parity versus the safe-haven Swiss franc for the first time in seven years.

On technical fronts Dollar Index RSI stood at 82.63 and currently it is trading above all MA. So, BUY position can be taken with following target and stoploss:

TRADE SIGNAL – : Dollar Index – BUY: 99.17, TARGET: 99.24, STOP LOSS : 99.05

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