Russia to respond for expulsions

Russia expelled 60 diplomats on Thursday and ordered the US ambassador to close the St. Petersburg consulate. White house officials stated that Russia’s response was not anticipated and that it marked a deterioration of their relationship. Worries increased, as the Kremlin spokesman stated that Moscow is closely watching any ideas floated by British PM Theresa May to limit the marketing of Russian debt by London. On other headlines, the UN Secretary General Guterres, stated yesterday that the situation was “similar to a large extent, to what we lived in the cold war”. Overall, there could be further escalation of the situation and more negative headlines could increase uncertainty.

EUR/USD traded in a sideways manner yesterday between the 1.2355 resistance line and the 1.2230 support line. We might see the pair continue to trade in the same manner today, however with some bullish tones as the financial data due out today could support the common currency. Should the bulls take over the market we could see the pair breaking the 1.2355 resistance line and aim for the 1.2455 resistance level. On the other hand should the bears take the reins we could see the pair breaking the 1.2230 support line and aim for the 1.2100 support barrier.