The euro was marked sharply lower at the open yesterday as traders sought to gauge the impact of Russian sanctions and the war clouds hanging over Ukraine at the moment. European banks are most exposed to the sanctions and that is evident in the reaction in equities and the euro.
That said, the single currency has managed to pull back some of the losses and holding at support around 1.1106-21 against the dollar. In turn, price has recovered but the near-term chart still alludes to sellers being in control:
The key hourly moving averages are still limiting gains with the 100-hour moving average (red line) @ 1.1228 the latest to keep a lid on the upside move on the day.
Russia-Ukraine developments will still be the key risk factor at the moment but if the market mood does continue to improve, we could see EUR/USD try to close the Monday gap lower though the 200-hour moving average (blue line), now @ 1.1285, may keep a lid on gains until there is more clarity about how things will play out.
