Euro Moves Higher as Tensions are De-escalated
The Euro moved higher on Tuesday following a decline in Monday that came as riskier assets faced pressures in the face of the Russian insurgence into the Ukrainian peninsula of Crimea. On Tuesday Russian President Putin commented that “violence with be the last resort” with regard to handling the issues he perceives in Ukraine. The Euro received a boost on this news, recovering all of Monday’s losses.
News that Russian President Putin has recalled some troops back to their bases is seen as a conciliatory gesture. The global capital markets are generally retracing part of yesterday’s response to the weekend developments. Even though the situation in Ukraine and Crimea are not very clear, the important point for investors is that there has not been any escalation. The US push for a more assertive response in the realm of sanctions was softened by Europe’s efforts for more diplomatic efforts first.
Europe seems more willing to accept Russia’s demand for a sphere of influence. However, the move in Kiev to drop Russian as the second official language was too much for Putin who apparently saw it, like greater economic integration with the EU as a step on a slippery slope that would make it increasingly difficult to block it from joining NATO.
The EURUSD held support near the 10-day moving average at 1.3755. Resistance is seen near the recent highs at 1.3850. Momentum is positive with the MACD (moving average convergence divergence) index printing in positive territory with an upward sloping trajectory. The RSI(relative strength index) moved higher with price action and is printing near 58, which is on the upper end of the neutral range.
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