• EUR/USD falls following headlines surrounding the Ukraine crisis.
• More sanctions have been imposed on Russia for its invasion of Ukraine, along with Western leaders extending weaponry aid.
• Geopolitical tension being the major catalyst, Euroland inflation data and second tier US data are also eyed.

Euro plummeted during starting day of the week amid escalating tensions between Russia and Ukraine.

The Russian advance into Ukraine has continued throughout the weekend. Russian military vehicles entered Ukraine’s second-largest city Kharkiv, with reports of fighting taking place and residents being warned to stay in shelters.

More sanctions have been imposed on Russia for its invasion of Ukraine. The U.S., Europe and Canada agreed on Saturday to remove key Russian banks from the interbank messaging system, SWIFT. The U.K. and EU have also closed their airspace to Russian aircraft.

US administration official cited that Belarus is preparing its military troops to send them to support the Russian military as soon as on Monday. Australian government announced on Monday that, they will provide lethal military equipment to Ukraine in response to Russian military activity last week.

The Canadian Foreign Affairs Minister Melanie Joly also made an announcement that their administration will provide an additional $25 million worth of defensive military equipment to Ukraine.

Along with Western leaders favoring Ukraine and providing weaponry aid to support them indirectly against Putin’s decision of destruction in Ukraine. Even other nations are supporting Ukraine, the overall picture of the war between Moscow and Kyiv is escalating further. This may advocate the situation of recession in Europe and the EU (European Union) will require resorting to cautioned fiscal policies. Also, this has weakened the euro against the greenback.

Whereas Russia’s Putin said he was giving the nuclear readiness order because “top officials in NATO’s leading countries have been making aggressive statements against our country,” according to a report from Russian state news operator TASS.

Along with the Ukraine crisis, Euroland inflation data will be key and markets look for upside risks in Germany & the euro area in general. Market will also keep an eye on US trade numbers for January and Chicago Purchasing Managers’ Index for February for short term direction.

EUR/USD 4 Hour Chart:

Support: 1.1196 (S1), 1.1127 (S2), 1.1088 (S3).

Resistance: 1.1304 (R1), 1.1343 (R2), 1.1412 (R3).

Amidst the escalating tensions between Russia and Ukraine, we expect a bearish trend for EUR/USD.