Author: Amar – Technical Analyst
In the early hours of Friday’s Asian trading session, reports circulated that Russia had attacked the Zaporizhia nuclear power plant in Ukraine. It is the largest of its kind in Europe. The euro headed for its worst week against the dollar in nine months as the war in Ukraine and the prospect of persistently high commodity prices continued to weigh on expectations for European economic growth. Ukrainian Foreign Minister Dmytro Kulabe, who also reported on the attack, said a fire broke out at the facility, raising security concerns. He also noted that firefighters were initially unable to reach the fire.
As a result, the euro fell another 0.48% to $1.1009, its lowest since May 2020. It is down 1.84% this week, which would be the worst week for the euro since June 2021. Russian forces continued to surround and attack Ukrainian cities on the eighth day of their invasion, including Mariupol, the main eastern port, which was heavily bombed. This war will be devastating for Ukraine. As for Russia, the short and long-term effects will definitely hurt the economy. But EU countries will also be the hardest hit by these sanctions.
Technically, on the euro sides, EUR/USD rates have established fresh yearly lows, falling below 1.1050 for the first time. The euro continues to struggle in the wake of sanctions on Russia as the funding market stresses demand for the US dollar. As for EUR/JPY, rates are falling from their record highs towards their multi-decade downtrend line; EUR/USD just broke out of a range; EUR/GBP rates are near their lowest levels since the Brexit vote in 2016.