Euro weakens, rouble slumps as sanctions piled on Russia

EUR/USD

EUR/USD is trading down 0.31% at 1.1183

The Russian rouble plunged and the euro nursed losses against the U.S. dollar on Monday as the West ramped up sanctions against Russia over its Ukraine invasion, prompting investors to shun riskier currencies.

Western allies have ramped up efforts to punish Russia with new sanctions including cutting off some of its banks from the SWIFT financial network and limiting Moscow’s ability to deploy its $630 billion foreign reserves and shuttering their airspace to Russian aircraft. Companies also reported divestment plans.

After plunging 30% to a record low of 120 per dollar, the rouble recovered some ground, to trade down about 24% on the day at 111 per dollar, as an emergency rate hike and other urgent measures adopted by the Russian central bank helped it trim losses.

Still, outside of the rouble the FX market reaction has been relatively stable, market participants said.

“There is clearly weakness in east European currencies even outside of the rouble… but at the same time they are not really weakening to new record lows or anything like that,” said Brad Bechtel, global head of FX at Jefferies, in New York.

Officials from Russia and Ukraine ended peace talks on Monday and will return to their respective capitals for further consultations before a second round of negotiations, RIA news agency quoted Ukrainian presidential adviser Mykhailo Podolyak as saying.

News of the talks helped soothe some nerves and the euro pared losses to trade down 0.49% on the day at $1.1212, after earlier falling more than 1% to a four-day low of $1.1121.

On technical fronts EUR/USD RSI stood at 37.98 and currently it is trading below all MA. So, SELL position can be taken with following target and stoploss:

TRADE SIGNAL – : EUR/USD – SELL: 1.1181, TARGET: 1.1164, STOP LOSS : 1.1218

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