The Euro is poised to go lower on Russian-Ukrainian turmoil
The Euro has headed lower today and we believe that this is only the beginning as tensions in Ukraine are not likely to subside any time soon. Eastern Europe seems to be in shambles as the sovereignty of Ukraine is questioned by Russian military forces.
Any reaction to escalating tensions could put the Euro into a tailspin and provide US dollar bulls with substantial impetus. There was a lot of data releases today but none of them really mattered. It was all about the flow of money away from risky assets into the US dollar in the end.
We are firm believers that this could be only the beginning - this is why we are looking to buy daily puts for tomorrow in this pair. The data from the Euro Zone has been strong today, yet we couldn't say anything negative about the US data either.
The manufacturing sector on both sides of the Atlantic has stabilized rather nicely with Personal Income in the US rising by 0.3% in the month of January, which could be an indication that some sort of inflationary pressures could finally be materializing.
As the turmoil progresses in Ukraine any news of a peaceful resolution could be very bullish for the Euro, while any open confrontation should benefit the US dollar at this point in time.
The binary options forex pair has started in early Asia around 1.3760, the European morning has driven it as high as 1.3790, however selling emerged as the full scale of European trading kicked in. Until the London fix the pair still held above 1.3770, however with London out of the way the pair started its slide towards 1.37.
Nice bids materialized around 1.3726 - previous resistance, which is now support. We would buy daily puts for tomorrow, Tuesday, on an hourly close below 1.3725.