EUR/USD reclaims the 1.1200 figure post-printing a YTD low at 1.1106 as Russian's invasion to Ukraine remains

• The EUR/USD losses in the day some 0.81%, amid Russia’s offensive on Ukraine.
• Conflict woes between Ukraine and Russia dampened market players’ mood.
• EUR/USD Technical Outlook: Neutral-downward biased, though a daily close below 1.1200, could exacerbate a move towards 1.1100.

The shared currency is dropping during the North American session, though it rebounds off daily lows at 1.1106, and is recovering slightly as the session progresses, amid a renewed upbeat market mood, portrayed by US equity indices with gains. At the time of writing, the EUR/USD is trading at 1.1207.

In the meantime, the US Treasury yields pare earlier losses, with the US 10-year T-note yield flat, sitting at 1.970%, while the greenback remains bid, with the US Dollar Index up 0.96%, currently at 97.12, retreating from the 97.73 level, last seen in July 2021.

At the moment, the market sentiment improved. However, woes in the Ukraine – Russia conflict remain. In the Asian session, Russian President Vladimir Puttin announced that a special military operation in Ukraine was underway. Russia’s operation deployed bombers loaded with weapons, special forces and launched missiles to Ukrainian command centers.

Western and NATO countries condemned the attack from Russia to Ukraine and will impose another tranche of sanctions, more decisive and harmful than the previous ones. Some of the sanctions that wi imposed are: freezing assets in the EU and blocking Russian banks to EU financial markets, while UK’s prime minister is pushing for Russia’s ejection of the SWIFT payment system.

Regarding macroeconomic data, the EU economic docket featured ECB speakers. ECB’s Stoumaras mentioned that the APP would remain until the end of 2022, while Holzman commented that the Ukraine conflict would delay the end of QE. Regarding inflation, ECB Schnabel said that it is higher than expected and broadening but emphasized it would tame under 2% in the year.

Across the pond, US Initial Jobless Claims for the week ending on February 19 rose to 233K, lower than the 235K foreseen, while PCE Prices for the Q4 rose to 6.3% q/q, lower than the 6.4% estimations.

Therefore, the EUR/USD pair would still be subject to market sentiment. If tensions dwindle, it could be probable that the EUR/USD could print another leg-up towards the 1.1300 area. In comparison, further escalation would witness another attempt at the 1.1100 level.

EUR/USD Price Forecast: Technical outlook

The EUR/USD is downward biased as depicted by the daily moving averages (DMAs) above the exchange rate. Nevertheless, the sudden jump on the pair, attributed to ECB’s hawkish tone perceived on its February monetary policy, spurred a rally to 1.1400. From a technical perspective, the EUR/USD is neutral-downwards.

On the downside, the EUR/USD first support would be 1.1200. Breach of the latter would expose last year’s November 24 daily low at 1.1186, followed by February 24 daily low at 1.1106.