EURUSD Jumps as Traders Look Past Yesterday's Events
22 February 2022
Sentiment suddenly improved on Monday, pushing the EURUSD pair half a percent higher during the EU session.
Earlier today, China has weighed in for the first time after Vladimir Putin's Monday night speech where he issued Russia's formal recognition of independence for Ukrainian separatist regions Donetsk and Luhansk, followed by a brief signing ceremony and with what has been billed as "peacekeeping forces" entering the areas.
In his official comments, Foreign Minister Wang Yi urged calm and a lowering of tensions in the region, calling for "dialogue and negotiations." His words carried in state media underscored that China's stance on the Ukraine issue is consistent, noting that "The legitimate security concerns of any country should be respected," according to a readout in state-run Global Times.
Provided Putin's forces don't invade the rest of Ukraine, the tensions could ease over the following days, which could be optimistic news for the markets.
It looks like the double bottom pattern on the hourly chart of the EURUSD pair. The support of that formation is at 1.1290, with the resistance near 1.1390. If sentiment improves further, the euro could quickly rise toward that resistance.
Once the pair jumps above 1.14, the formation could become valid, with a total potential of 100 pips, thus, targeting 1.15.
On the other hand, the decline below 1.1330 might lead to a retest of 1.1290. Failure to hold that support might send the shared currency toward 1.12.