EUR/USD pares earlier losses, bounces off lows near 1.0850

• EUR/USD regains some composure after dropping to 10850.
• The greenback climbs to fresh peaks near 100.00, recedes afterwards.
• The EU announces new sanctions against Moscow.

The single currency remains under pressure and drags EUR/USD to new 4-week lows in the 1.0850/45 band at the end of the week.

EUR/USD now targets the 2022 low near 1.0800

EUR/USD manages to trim part of the earlier drop to new multi-week lows, although it stays under intense downside pressure against the backdrop of geopolitical concerns and persevering USD buying.

Indeed, geopolitics are back to the fore after the EU announced new sanctions against Russia, this time targeting coal and opening the door to potential sanctions against Russian oil and gas sectors.

Also weighing on the risk complex appears the unabated advance in US yields amidst growing perception that the Fed could accelerate the pace of its normalization as well as the reduction of its balance sheet.

Nothing scheduled in the euro docket, while Wholesale Inventories will only be released across the pond.

What to look for around EUR

Sellers continue to rule the sentiment around EUR/USD, which extended the downtrend to fresh lows in the mid-1.0800s earlier on Friday. The multi-session negative performance of the pair came in response to the firmer pace of the greenback and renewed geopolitical concerns. As usual, pockets of strength in the single currency should appear reinforced by speculation the ECB could raise rates before the end of the year, while higher German yields, elevated inflation, the decent pace of the economic recovery and auspicious results from key fundamentals in the region are also supportive of a rebound in the euro.

Key events in the euro area this week: France Presidential Election (Sunday, April 10).

Eminent issues on the back boiler: Asymmetric economic recovery post-pandemic in the euro area. Speculation of ECB tightening/tapering later in the year. Presidential elections in France in April. Impact of the geopolitical conflict in Ukraine.

EUR/USD levels to watch

So far, spot is down 0.09% at 1.0867 and a breakdown of 1.0845 (monthly low April 8) would target 1.0805 (2022 low March 7) en route to 1.0766 (monthly low May 7 2020). On the flip side, immediate resistance comes at 1.1147 (55-day SMA) followed by 1.1184 (weekly high March 31) and finally 1.1222 (100-day SMA).