EUR/USD to drop substantially towards the June 2002 low near 0.9305 – BBH

The euro remains heavy as Ukraine tensions pick up. The EUR/USD pair could plummet as low as the June 2002 low near 0.9305, economists at BBH report.

Ukraine is heating up again

“With the fundamentals deteriorating, we look for the euro to soon break below this month’s cycle low near 0.9865 and maintain our medium-term target at the June 2002 low near 0.9305.”

“Russian President Putin announced a partial mobilization of troops. This comes just after the announcement yesterday that the Russian-held areas of Donetsk and Luhansk will vote on joining Russia in the coming days. Ukraine and the West will not recognize these votes and so tensions are likely to remain high with no diplomatic solution in sight.  Thus, the fighting could easily become more widespread if Ukraine makes any effort to retake these regions.”

“Growing risk-off impulses suggest markets had become much too complacent about Ukraine in recent weeks.”