By MXT Global
In February 2014, the president of Ukraine, Viktor Yanukovich, was impeached by the country’s interim government after countless protests caused a revolution. The former president had made several well-known deals with the Russian Federation, and the people of Ukraine clearly indicated that they have a strong desire to ally the country with Europe and to join the European Union.
The volatility has proved both profitable and nightmarish for traders willing to take the risks, with MXT Global’s Forex analysts providing their technical analysis.
Sources: Bloomberg, Emirates NBD Research
Three days after the temporary government had been established, Russian soldiers invaded the Republic of Crimea, which is a small peninsula that is located in the southern part of Ukraine.
The Revolution
The initial protests began in early February. In the first 15 days of February, the value of the euro increased substantially.
The main protests against the government of Ukraine took place in Kiev and other major cities between February 18, 2014 and February 23, 2014. During this time period, the EUR/USD remained stable, and only small fluctuations in the currency pair’s value occurred.
The Invasion
The international worth of the EUR/USD fell swiftly on February 26, 2014 as news first reached investors that Russia had sent troops into the Republic of Crimea.
However, banks began to purchase euros again on February 28, and investors started to rapidly liquidate dollars. On this day, the exchange rate of euros to dollars increased by almost one percent.
In early March, the European Union and the United States officially issued statements that condemned Russia’s actions; however, Vladimir Putin announced that Russia would not recognize Ukraine’s new government.
After these announcements, the value of the EUR/USD increased rapidly again.
The Input Of The People
A referendum was scheduled for the middle of March, and during the 10 days that preceded the vote, the international value of the euro continued to rise steadily. When the result was announced, the government of Russia proudly proclaimed that the 2.5 million people who live in the area had opted to make the Republic of Crimea a new province of Russia.
As a result, the value of the euro fell swiftly during the next several days.
In spite of a substantial gain on March 24, 2014, the exchange rate of euros to dollars has been dropping steadily since the announcement because of the European Union’s inability to stop the Russian annexation of the peninsula.
The estimated worth of the euro increased slightly after 100 members of the United Nations created a non-binding resolution that indicated that the results of the referendum were invalid.
About the Author:
This article was provided by the analysts at MXT Global. MXT specialises in Forex and Binary Options trading with MetaTrader.
