EUR/USD, EUR/GBP and USD/JPY slip towards support on threat of Russian invasion of Ukraine.
EUR/USD dips to 55-day simple moving average on threat of war in Ukraine
Last week’s EUR/USD three-month spike high at $1.1495 has been swiftly followed by a slide back to the 55-day simple moving average (SMA) at $1.1333, taking the currency pair back towards the middle of its December sideways trading range.
EUR/USD is likely to tumble further towards the early January low at $1.1272 amid rising tensions in Ukraine. Further potential support sits at the $1.1122 mid-February low.
Minor resistance can be found between the late-November and December highs at $1.1382 to $1.1386.
EUR/GBP tumbled to 61.8% Fibonacci retracement
Friday’s EUR/GBP slip through the 55-day SMA at £0.8421 swiftly took it all the way to the 61.8% Fibonacci retracement of the February rally to £0.836 which offered support.
If this level were to be slipped through, the early-January low at £0.8335 would be eyed next, together with the mid-January low at £0.8324. Key support sits slightly further down between the January and early-February lows at £0.8305 to £0.8286.
Resistance is to be seen between the January high and 55-day SMA at £0.8421 to £0.8422.
USD/JPY drops towards two-month support line at ¥114.95
Last week’s USD/JPY rejection by its January high at ¥116.35 has been accompanied by a Bearish Engulfing pattern on the daily candlestick chart which could lead to the two-month support line at ¥114.95 soon being reached.
If slipped through, the 55-day SMA at ¥114.51 would be next in line, together with the early February low at ¥114.16. Further minor support is seen at the 8 December high at ¥113.96 and major support between the mid-to-late January lows at ¥113.48 to ¥113.47.
Significant resistance sits between the January and current February highs at ¥116.33 to ¥116.35.
Axel Rudolph | Market Analyst, London
15 February 2022