EUR/USD retreats from 1.1135 after Biden confirms Russian flights ban

EUR/USD looks down to 1.1090 amid escalation in restrictions on Moscow by the US.

The Ukraine crisis is likely to extend in whole Europe gradually.

The EUR/USD pair has attracted significant bids near 1.1135 amid a fresh wave of risk aversion theme as US President Joe Biden confirms banning the Russian flights from using the US airspace. The plunge in the major looks to send it near Tuesdays low at 1.1090, which is also an eight-month low.

The US President Joe Biden, while delivering his first State of the Union confirms that the Kremlin is now isolated from the world and sanctions relating to restrictions on technology imports to Russia will weaken its economic strength and military.

No wonder, the Russian leader Vladimir Putin will retaliate by escalating more military activity on the Ukrainian borders and destruction in Ukraine. But it is material now that the Russian economy has been crippled pertaining to the multiplier effects of sanctions and the Ukraine crisis may extend to the whole European economy.

It is well ‘loud and clear’ that Europe imports 40% of its natural gas consumption and more than a quarter demand for oil from Russia. And, Europe has to go through implications now, which is why the EUR/USD pair has been hammered the most among all majors amid the Russia-Ukraine war.

Meanwhile, the US dollar index (DXY) looks to reclaim Thursdays high at 97.72 amid improving safe-haven appeal and upbeat US Manufacturing PMI and New Orders Index numbers.

Now, investors will shift their focus on the Federal Reserve (Fed) Chair Jerome Powells testimony, which is due on Wednesday.