Euro Calm Despite Heightening Tensions With Russia
Today’s Spotlight Market
The so called ?safe-haven? currencies, such as the Swiss Franc and the Japanese Yen, have yet to reflect any flight to safety buying as a result of the ongoing Russian crisis. Gains in the Swiss Franc may be limited due to the ?ceiling? in place by the Swiss National Bank (SNB), where the SNB is willing to sell Francs in order to prevent the currency from strengthening. Additional interest in buying the Yen may be muted by Bank of Japan policies to weaken the Yen to help promote inflation and pull the country from its decades-long deflationary spiral.? ?
Fundamentals
?What me worry?? seems to be the mindset of Euro bulls, as the currency continues to show surprising strength despite increasing Russian tensions and ?dovish? talk from the European Central Bank (ECB).? ECB President Mario Draghi made comments last week that the continued strength in the Euro could force the central bank to implement further easing monetary policies, such as quantitative easing, in order to aid European economic recovery efforts. ECB governors also voiced their concerns that inflation targets are not being met, which could add further pressures for action by the central bank to help weaken the value of the Euro. Geopolitical concerns regarding Russia?s aggression into Ukraine have not yet triggered a sell-off in the Euro despite some concerns, although remote, that Russia may consider halting shipments of Natural Gas to Europe should economic sanctions be put in place. European equity markets were lower on Friday, but overall remain in a bullish mode, which adds evidence to the belief that market participants do not yet fear any major economic fallout from the Russian crisis.???? ?
Technical Notes? -? View Today’s Chart
Looking at the daily continuation chart for the Euro futures, we note the steady upward move since major lows were made back in July 2012. Front-month futures have been holding above the 200-day moving average since September 2013, which has kept bulls in charge for nearly 8 months. The 14-day RSI is neutral to slightly bullish, with a current reading of 54.37. Support is found at 1.3669, with resistance seen at 1.3967.
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