• EUR/USD embarks on a trip to test the lows of 2022. 
• Ukraine's crisis and uncertainty remains in the driving seat.

EUR/USD is in free fall on Tuesday and is encroaching on the 2022 lows near 1.11. The lows of the day have so far have been 1.1107 and the 2022 low printed on Feb.24 was 1 pip below that. The high was 1.1233, so there has been some big movement. ''Traders are increasingly hedging against declines in the euro as they brace for the damage that war in Ukraine could wreak on the European economy,'' a Bloomberg article read today. 

It is risk-off across the board with European stocks tumbling and there was a stampede for US and German government bonds due to the huge uncertainty caused by Russia's invasion of Ukraine. Losses for the pan-European STOXX 600 index sent it down nearly 2% by midsession and Wall Street is also in a sea of red. A majority of major S&P 500 stocks are trading in the red with financials the weakest group. 

US 10-year Treasuries, which are a key driver of global borrowing costs are falling sharply to five-week lows. The 10-year German Bund yield was heading for its biggest one day fall since 2011.

February PMI data showed momentum in eurozone manufacturing growth had already waned slightly last month, although it was still relatively strong and firms said supply chain constraints had eased. With that being said, ''Europe remains highly exposed to Russia in some sectors, particularly energy,'' analysts at TD Securities explained. ''As the West rushes to sanction Russia, Europe is likely to feel the hit the hardest. This poses a typical stagflationary shock, and growth is likely to be lower, and inflation higher, than otherwise.''

The dollar remains firm as the crisis in Ukraine continues with the  DXY index up for the second straight day and trading now well above 97. The high has been 97.425 so far. After there, levels to watch are the June 2020 high near 97.802 and the May 25, 2020, high near 99.975.  This could leave the euro exposed all the way into the 1.0850s. 

EUR/USD technical analysis

This is a snapshot of the weekly chart. As illustrated, there is little to no support all the way to 1.1020 and then plenty of imbalance to mitigate into the 1.08 figure thereafter.