Equities rebounded sharply on Wednesday despite of the intensifying conflict between Russia and Ukraine and a surge in crude oil price. At the same time, US equities moved higher after the testification of the Fed Chair Jerome Powell, implying that the policy rate is likely to hike in March regardless of the war in Ukraine. The Dow Jones Industrial Averages climbed 1.79% while the Nasdaq Composite gains 1.62%; meanwhile, the S&P 500 added 1.86% at the end of the day on Wednesday.

Following the major economic sanctions toward Russia, rumors said that major cryptocurrencies might be next, including Bitcoin and Ethereum. According to the statistics from cryptocurrency provider Kaiko, it showed that transactions on centralized exchanges in Ruble has surged to the highest levels in months; this might be the move that Russians are using cryptocurrencies to hedge their risks, resulted from sanctions. With all of that, the US is reportedly trying out a new way to dial up the pressure on Russia and Putin, sanctioning cryptocurrencies like Bitcoin and Ethereum.

As Russia’s turmoil lifts oil price, OPEC+ eventually ratifies modest supply hike. The OPEC+ and its allies have agreed to increase 400,000 barrels a day, continuing the gradual restoration of output since the pandemic. However, oil price continues to surge above $110 a barrel on Wednesday.

Main Pairs Movement:

EURUSD falls to slightly below 1.1057, the lowest level in nearly two years. The euro dollar weakens as fears dominated financial markets; the war between Russia and Ukraine is going to have a negative impact on the economic growth, particularly in Eurozone besides in Russia and Ukraine themselves. On the other hand, the US ADP employment report adds 475K new jobs, better than expected; that being said, the US Fed is more likely to go ahead dealing with the policy rates, thus the US dollar gets boosted.

Gold declines from near- a 13 month high as risk sentiment is buoyed by the US Fed indicating the commitment to fighting inflation with interest rate hikes. Despite of the intensification of the war between Russia and Ukraine, gold dropped more than $17 per ounce in a minute after the speech from Jerome Powell.

WTI rallies for the third consecutive day, targeting a new high of $112.20 since 2017. The market sentiment is upbeat as the market continues to react and digest the impact of sanctions on Russia. Further price action of oil eye on the next step of OPEC+.

Technical Analysis:

GBPUSD (4-Hour Chart)

Cable traded sideways against the  Dollar over the course of yesterday’s trading. The U.S. ADP nonfarm employment change came in better than expected, thus buoying the Dollar. In his statement, Fed Chairman Jerome Powell stated his support for a 25 basis point interest rate increase in March; however, Chairman Powell reiterated the uncertainty that the crisis in Ukraine and Russia has brought to financial markets. On the economic docket, the U.K. is due to release its February PMI data and the U.S., its initial jobless claims figures for the previous month.

On the technical side, Cable successfully defended the support level at 1.3311. The key resistance level at 1.3435 still stands unchallenged. RSI for the pair has resumed to normal levels at 39.64. At the time of writing, Cable is trading below its 50, 100, and 200 day SMA.

Resistance:  1.3435, 1.35212

Support: 1.331

EURUSD (4-Hour Chart)

The Euro continued to trade lower against the Dollar for the second straight day. As of writing, the shared currency has fell 0.25% against the greenback. Worse than expected inflation data from the EU has sent the shared currency further down. With the U.S. Fed Reserve set on a tightening monetary policy, the Euro will continue to be disfavored compared to the Dollar.

On the technical side, the support level at 1.1087 still holds but this support level is relatively weak as the pair has dipped below multiple times. RSI for the pair sits at 38.17, as of writing. EURUSD is currently trading below its 50, 100, and 200 day SMA.

Resistance: 1.1224, 1.12793

Support: 1.11629

XAUUSD (4-Hour Chart)

Gold traded lower over the course of yesterday’s trading as global market participants reassessed the Ukraine – Russia crisis. The Dollar soared with the help of strong U.S. economic data and a strong rebound by U.S. equities. In his State of the Union speech, U.S. president Joe Biden reaffirmed the American public that President Putin’s aggression will not go without punished. Fed Chairman Jerome Powell’s support for a 25 basis point rate hike by March has also provided momentum for the greenback.

On the technical side, XAUUSD continues to be capped at 1950 for the past 2 days. Support level for gold at 1920 seems to have formed and the support level at 1900 still stands unchallenged. RSI for the pair has resumed to normal levels at 51.4, as of writing. Currently, XAUUSD is trading above its 50, 100, and 200 day SMA.

Resistance: 1909.16, 1953.407

Support: 1920, 1900

Economic Data:

Wall street three major indexes ended sharply on Tuesday, with the bank stocks tumbled due to falling U.S. Treasury yields and worries about the economic outlook after oil rose above $100 a barrel as Russia ramped up its crackdown on Ukraine. At the end of the market, the Dow Jones Industrial Average fell  1.76% to 33,294.95 points, the S&P 500 index lost 1.55% to 4,306.24 and the Nasdaq Composite Index dropped 1.59% to 13,562.46 points. Not only U.S. stocks were under pressure, but so was Europe, with major stock indexes in Germany, France, Italy and Spain closing down more than 3%, while the pan-European STOXX 600 index fell 2.4%.

10 sectors in the S&P 500 ended lower, with the financial sector falling the most, down 3.71%, followed by material and information technology sectors, down 2.31% and 1.99%, respectively. The only winner is the energy sector, which has received a huge boost from skyrocketing oil prices. In the financial sector, regional banks including Silicon Valley Bank Financial Group, Zion Bank and Regional Financial Corporation lead the way financial stocks sold off as U.S. government yields, which dropped 7.94%, 5.95% and 8.60% respectively. Large-cap bank stocks were also hit hard, with JPMorgan Chase falling to a 52-week low, Wells Fargo and Bank of America down 5.77% and 3.91%, respectively. In the energy sector, APA Corporation, Chevron and Occidental Petroleum were among the top gainers, gaining 4.66%, 3.97% and 7.0%, respectively.

Main Pairs Movement:

Tension in Eastern Europe continue to lead financial markets. Safe-haven assets continued to rise as Russia escalated its attack on Ukraine, while President Vladimir Putin said the invasion would continue until he hit his target. Neutral countries have joined the global effort to stop Russia. Countries such as Switzerland and Finland are either sending armored vehicles to Ukraine or joining the financial blockade against Moscow. Meanwhile, the next round of talks between Russia and Ukraine will take place on Wednesday.

The dollar rose against most of its major rivals, especially Euro. EUR/USD fell to its lowest since June 2020 and closed around 1.11200, while GBP/USD is hovering around 1.3320. On the other hand, commodity-linked currencies were relatively strong, with AUD/USD hovering around 0.7300 ahead of intraday gains and ended little changed around 0.7250. USD/CAD edged higher to settle near 1.2735 amid stocks fell and ignored record crude oil prices.

The gold prices continued to surge and topped $1,950 an ounce intraday, and held most of its gains at the market close. In addition, oil prices surged to their highest level in seven years on concerns that the Russian war would affect supply. WTI was trading as high as $106.76 a barrel, while Brent was trading at $107.25.

Technical Analysis:

GBPUSD (4-Hour Chart)

Cable fell sharp against the greenback as market sentiment turned risk off once again. Ramping up sanctions from global economic power houses did not seem to yield expected results, as President Putin continues to increase military presence in Ukraine. The Dollar continues to to be the choice for risk hedging, however, Fed Chairman Jerome Powell is due to speak on the 2^nd and could cause further price action for the Dollar.

On the technical side, Cable has fell through the short term support at 1.33722 and is consolidating around 1.3315, as of writing. RSI for Cable has dropped to 32.89, entering over-sold territory. GBPUSD is currently trading below its 50, 100, and 200 day SMA.

Resistance:  1.3435, 1.35212

Support: 1.331

EURUSD (4-Hour Chart)

The Euro sank against the Dollar and the shared currency is projected to head even lower. With no foreseeable end to the Ukraine-Russia crisis, Europe’s energy crisis is being exacerbated as global financial sanctions pile on to Russia. Despite no direct sanctions on Russian energy exports as of yet, European nations still rely heavily on Russian energy exports, thus escalating uncertainty in Eastern Europe will continue to have spill-over effects on the European region and its currency; furthermore, the ECB’s unwillingness to raise interest rates only acts as a downward pressure on the shared currency.

On the technical side, EURUSD has broken below our previously estimated support level at 1.116. As of writing, EURUSD is consolidating around  1.1116. RSI for the pair is sitting at 33.31, indicating some over selling. EURUSD is currently trading below its 50, 100, and 200 day SMA.

Resistance: 1.1224, 1.12793

Support: 1.11629

XAUUSD (4-Hour Chart)

Mounting tensions from the Ukraine-Russia crisis continue to send Gold prices higher. At the open of U.S. equity markets, Gold prices jumped 0.38% as market participants rotated into safe haven assets. However, the weaking U.S. treasury yield does not seem slow down the Dollar, evident from the Dollar index’s 0.77% intraday gain. As two of the world’s leading safe haven asset, Gold and the Dollar has recently exhibited highly correlated trading movements.

On the technical side, resistance levels for Gold seems to be irrelevant as any breaking news from Ukraine could send Gold flying through the resistance levels. Short term resistance level is projected at 1953 and Gold is firmly supported at the 1900 price level. RSI for XAUUSD is overheated at 71.49. XAUUSD is currently trading above its 50, 100, and 200 day SMA.

Resistance: 1909.16, 1953.407

Support: 1900, 1889

Economic Data:

Major indices declined on Monday following the weekend’s nuclear deterrent comment from Putin. However, equities market began splitting as the negotiation between Russia and Ukraine commenced. The Dow Jones Industrial Average declined 0.49% while the Nasdaq Composite closed higher at 0.41%; the S&P 500 closed slightly below the previous trading session, dropping 0.24% on Monday.

Currency markets were also a major area of volatility on Monday. In response to a currency move that the Ruble tumbled almost 22% against the US dollar and major sanction from several countries, the Central Bank of Russia decided to hike more than double of its interest rate, from 9.5% to 20%. 

Along with the US joined allies in Canada and Europe in moving to remove Russian banks from SWIFT, Switzerland addressed that it will freeze Russian assets, setting aside a tradition of neutrality. Data from Swiss national bank has shown that there are more than 11 billion worth of assets in 2020.

Main Pairs Movement:

GBPUSD seesaws around 1.3410 heading into the Asian session on Tuesday. The British Pound bounced back on Monday as markets saw the development of Russia and Ukraine, resulting in a downside move in the safe- heaven currency, the US dollar.

Gold was once boosted more than $30 on Monday, but it cooldown back to $1,906 in the US session as the market mod has improved following the negotiation of Russia and Ukraine. The first round of the negotiation looks peaceful, which pares the safe- heaven demand.

West Texas Intermediate surged 7% towards $100 mark on Putin’s nuclear threats and Russia- SWIFT ban. WTI price jumps as Russia is going to face disruptions and obstacles to its oil export without SWIFT system. In the meantime, OPEC+ has revised down the market surplus estimate for 2022.

Technical Analysis:

GBPUSD (4-Hour Chart)

Cable ended the day trading 0.4% higher than the previous day’s close. Market participants continue to favor the greenback as tensions between Ukraine and Russia are yet to resolve. Today’s Sterling gain is mostly attributed to decreasing U.S. treasury yields—the 10 year treasury yield is currently at 1.86%. With geopolitical conflicts yet to be resolved, the pound could continue to be dominated by the greenback.

On the technical side, Cable has found firm support around the 1.3311 price region. Near term resistance level at 1.3435 has been challenged but the pair is unable to break through that level yet. RSI for the pair sits at 47.1758. As of writing, Cable is trading below its 50, 100, and 200 day SMA.

Resistance:  1.3435, 1.3522

Support: 1.3311

EURUSD (4-Hour Chart)

The Euro-Dollar pair saw a sharp drop at market open, but the pair was able to regain some ground as market sentiment for the Euro improved. News of peace talks between Ukraine and Russia buoyed the Euro, however the Dollar remains dominant as the safe haven asset. Lowering U.S. treasury yields also benefited the Euro.

On the technical side, the Euro-Dollar pair is facing a key resistance at around the 1.12251 price region, but the pair would see another key resistance level around 1.12793. RSI for the pair sits at 46.67, as of writing. EURUSD is currently trading below its 50, 100, and 200 day SMA.

Resistance: 1.1224, 1.12793

Support: 1.11629

XAUUSD (4-Hour Chart)

Gold prices continue to be highly correlated to the events between Ukraine and Russia. Peace talks held today did not yield solid resolution to the conflict, unfortunately; furthermore, Russian president Putin’s unpredictable moves have sent gold prices higher. XAUUSD ended the day 1.07% higher than previous day’s close.

On the technical side, the resistance at 1909.16 is still firm, but gold prices can easily break through this level as market participants continue to use gold as a hedge for risk. RSI for XAUUSD 66.5, indicating some overbuying. Gold is currently trading above its 50, 100, and 200 day SMA.

Resistance: 1909.16, 1953.407

Support: 1900, 1889

Economic Data:

Market Focus

Stocks closed out a volatile week of trading, rebounding on Friday as markets reassessed the information from the war between Russia and Ukraine. US major equities, the Dow Jones Industrial Average climbed 2.5%, while the S&P 500 added another 2.2% on Friday. The technology-heavy weighted Nasdaq Composite rose 1.6%, climbing back to the bullish territory. The equities market got a boost after Moscow Kremlin said that Russia is ready to send a delegation for negotiation with Ukraine.

Countries around the world are imposing sanctions against Russia and President Putin over his aggressive invasion of Ukraine. At the moment, several countries are working on the potential ban on SWIFT toward Russia. Moreover, Germany halts its certification of the Nord Stream 2 following Russia’s invasion. The US applied sanctions on Russian banks and companies; it would cut off Russian companies from raising funds in the US, including some energy giants and banks.

Main Pairs Movement

Gold hovers slightly below $1,900 as markets take a breather from the tension between Russia and Ukraine. The main price action of gold remains to focus on the intensity of the war and the tightening expectations from the FOMC.

EURUSD falls to fresh low following the weekend headline surrounding the war. As there is no full picture of the prospects of the negotiations between Russia and Ukraine, markets embrace the safe-heaven, resulting in a decline in EURUSD. 

GBPUSD tumbles toward 1.3300 on Russia’s nuclear deterrent on Ukraine. In the meantime, Russia announces the ban on the UK- registered aeroplanes from landing in Russia’s airspace in terms of retaliation. 

AUDUSD slumps below 0.7200 amid the escalation of war between Russia and Ukraine. The nuclear comment from Russia put a huge downside pressure toward non-safe- haven currencies. 

Technical Analysis: 

EURUSD (4-Hour Chart)

The EUR/USD pair advanced on Friday, recovering from the lowest level since June 2020. This is because of the improving market mood, as Russia indicated it was ready for talks with Ukraine. The pair dropped to a daily low near the 1.1170 mark during the European session but then regained upside tractions to recover most of its daily losses. The pair is now trading at 1.1244, posting a 0.47% gain daily. EUR/USD stays in the positive territory amid weaker US dollar across the board, as the risk aversion weighed on the greenback and helped riskier assets like EUR/USD to find demand. Russia said it was ready to send a delegation to Minsk, which revived some minor hopes that a diplomatic solution could ease the conflict. For the Euro, ECB President Christine Lagarde said today that the central bank stands ready to take whatever action is needed to ensure price and financial stability.

For the technical aspect, RSI indicator 44 figures as of writing, suggesting that the downside is more favoured as the RSI stays below the mid-line. But for the Bollinger Bands, the price rise towards the moving average after touching the lower band, indicating a continuation of upside traction for the pair. In conclusion, we think the market will be bullish as the pair is now testing 1.1240 resistance—a break above that level might open the road for near-term profits.

Resistance:  1.1240, 1.1382, 1.1465

Support: 1.1161, 1.1132

GBPUSD (4-Hour Chart)

The pair GBP/USD edged higher on Friday, struggling to extend the rebound from a two-month low that touched yesterday on mixed market sentiment. The pair was trading higher to a daily top above 1.3430 level during the Asian session but failed to preserve its bullish momentum and retreated to surrender some daily gains. At the time of writing, the cable stays in positive territory with a 0.16% gain for the day, flirting with 1.3380~1.3400 area on renewed US dollar weakness. The news reported that a probable meeting between Russian and Ukrainian officials have lent some support to the market mood. But the fact that Russian forces have entered the Obolon district in Kyiv might limit further gains for the cable. For the British pound, British finance minister Rishi Sunak said he had spoken with BoE Governor Andrew Bailey on Thursday to ensure financial stability after Russia’s invasion.

For the technical aspect, RSI indicator 36 figures as of writing, suggesting that the pair remain technically bearish in the near term. For the Bollinger Bands, the price seems to lack momentum to rise towards the moving average, indicating that the pair could witness some downside movement. In conclusion, we think the market will be bearish as the pair might re-test the 1.3372 support—a significant positive shift risk sentiment is also unlikely to be seen in the short term.

Resistance: 1.3456, 1.3508, 1.3636

Support: 1.3372, 1.3336

USDCAD (4-Hour Chart)

As the market mood improved slightly heading into the weekend, the pair USD/CAD came under selling pressure and extend its previous day’s slide from a two-month high amid the retreating US dollar. The pair was trading lower at the start of the day and failed to stage a rebound in the early European session, now seeing fresh selling on positive news about the Russia/Ukraine war. USD/CAD is trading at 1.2740 at the time of writing, losing 0.60% daily. Reports from Russia said that Vladimir Putin is open to sending a delegation to Minsk for talks with Ukraine. Therefore, the latest headlines about the Russian invasion disfavored the greenback and dragged USD/CAD lower. On top of that, falling crude oil prices failed to act as a tailwind for the USD/CAD pair, as WTI has eased back to near $92.00 a barrel, amid the absence of sanctions from the US, EU and UK that directly restrict Russian energy exports.

For the technical aspect, RSI indicator 46 figures as of writing, suggesting that the downside is more favoured as the RSI stays below the mid-line. As for the Bollinger Bands, the price has crossed below the moving average, showing that the downside traction should persist. In conclusion, we think the market will be bearish as long as the 1.2840 resistance line holds.

Resistance: 1.2840, 1.2911

Support: 1.2682, 1.2575, 1.2462

Economic Data: 

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Market Focus

U.S. stocks staged a massive reversal Thursday after Wall Street’s main benchmarks each plunged more than 2% in early trading as Russia’s military invasion of Ukraine roiled financial markets around the globe. Nasdaq Composite rebounded from a morning sell-off that saw the index tumble more than 3% to close 3.4%, or 436 points higher, at 13,473.58 in its best day of 2022. The Dow Jones Industrial Average closed in positive territory after plunging more than 800 points during intraday trading, and the S&P 500 bounced back from a drop of 1.5% to close 1.5% higher at 4,288.69.

President Joe Biden imposed stiff sanctions on Russia over its invasion of Ukraine as Western nations warned that Kyiv could fall. As Russian tanks, troops and aircraft pushed closer to Ukraine’s capital city, Biden, speaking to the nation from the White House, promised to inflict a “severe cost on the Russian economy” that will hamper its ability to do business in foreign currencies.

“This is a dangerous moment for all of Europe,” Biden said, adding that the “next few weeks and months will be hard on the people of Ukraine.” The Russian military effectively eliminated Ukraine’s air defenses and rapidly advanced across the neighboring country, meaning Kyiv could quickly be overrun as well, a senior Western intelligence official said.

After weeks of warnings that an attack would bring about a “massive” economic response, Biden announced that the U.S. would sanction Sberbank — Russia’s largest lender — and four other financial institutions that represent an estimated $1 trillion in assets, as well as a broad swath of Russian elites and their family members. Treasury said the penalties target “nearly 80 percent of all banking assets in Russia.”

Main Pairs Movement:

Panic took over financial markets as Russia launched a military attack on Ukraine. Moscow attacked not only the Donbas region but got near Kyiv during US trading hours. Russia ignores global sanctions and seems determined to take full control of Ukraine.

Gold soared to $1.974.40 a troy ounce, its highest since September 2020. The yellow metal then retreated and plummeted to the intraday lows at $1,880.00 price zone during US trading hours, as investors unwind fear-related trades following US President Biden’s statement.

Meanwhile, Federal Reserve Raphael Bostic noted that Fed policy is poised to return to a more normalized stance. Among other things, he added that he is “very open” to going for more than 3 rate hikes this year. 

EUR/USD recovered from a fresh 2022 low of 1.1105 to currently trade around 1.1195. The GBP/USD pair stands at around 1.3380, while commodity-linked currencies dropped significantly during Thursday’s trade. Crude oil prices also dipped into negative territory after reaching multi-year highs. WTI traded as high as $100.50 a barrel, now changing hands at around $94.50. Brent trades at $99.50.

Technical Analysis:

EURUSD (4-Hour Chart)

The EUR/USD pair tumbled on Thursday, extending its previous slide from 1.1360 level amid panic through financial markets. The pair was surrounded by heavy bearish momentum most of the day, collapsing to monthly lows below 1.1160 mark in early American session. The pair is now trading at 1.1148, posting a 1.36% loss on a daily basis. EUR/USD stays in the negative territory amid risk-off market sentiment, as Russia launched a full scale of invasion on Ukraine earlier in the day. The fact that Russia started the military assault on Ukraine bolstered the demand for the safer assets like the US dollar, meanwhile acting as a headwind for the EUR/USD pair. For the Euro, the latest geopolitical developments and risk appetite trends will keep deciding near-term direction for the currency, as there are no releases in the Eurozone calendar.

For technical aspect, RSI indicator 20 figures as of writing, suggesting that the pair is in oversold zone now, a trend reversal could be expected. But for the Bollinger Bands, the price is dropping out of the lower band, indicating a strong trend continuation for the pair. In conclusion, we think market will be bearish as the pair is heading to test the 1.1132 support. The pair is clearly bearish in its 4-hour chart, with technical indicators heading firmly lower within negative levels.

Resistance:  1.1284, 1.1356, 1.1465

Support: 1.1132, 1.0995

GBPUSD (4-Hour Chart)

The pair GBP/USD plunged on Thursday, suffering heavy losses and dropping to 1.3300 area after Russia’s invasion of Ukraine. The pair remained under massive selling pressure and refreshed its monthly low near 1.3310 mark, extending its heavy intraday losses heading into American session. At the time of writing, the cable stays in negative territory with a 1.43% loss for the day, preserving its downside traction on renewed US dollar strength. Investors now abandon their riskier assets and turned to safe-haven assets after Russian President Vladimir Putin authorized a special military operation in Donbas earlier in the day. A massive sell-off was also seen in the equity markets. For British pound, the currency is now undermined by the fact that the escalating tensions between Russia and  Ukraine could dampen prospects for a 50 bps rate hike by the BoE at its March meeting.

For technical aspect, RSI indicator 19 figures as of writing, suggesting that a trend reversal could be possible as the pair is in oversold zone now. For the Bollinger Bands, the price is moving out of the lower band, indicating a strong trend continuation. In conclusion, we think market will be bearish as the pair just dropped below the previous 1.3372 support. If the bear can find constant strength below that level, short-term additional losses could be expected.

Resistance: 1.3522, 1.3636

Support: 1.3372, 1.3249, 1.3185

USDCAD (4-Hour Chart)

After Russia launched a full scale of invasion on Ukraine today, the pair USD/CAD came under slightly upside momentum amid stronger US dollar across the board. The pair witnessed fresh buying most of the day and reached the highest level since December 2021, now retreated slightly to surrender some of its daily gains. USD/CAD is trading at 1.2841 at the time of writing, rising 0.83% on a daily basis. Russian troops continued to cross the Ukrainian border and have reportedly destroyed Ukrainian military bases. Therefore, the worsening situation in Ukraine help the greenback to find strong demand and pushed USD/CAD higher. However, surging crude oil prices had underpinned the commodity-linked loonie and limit further gains for USD/CAD pair. WTI advanced to around $100 a barrel for the first time in eight years, as concerns about disruptions on global oil supply elevate following the attack from Russia.

For technical aspect, RSI indicator 69 figures as of writing, suggesting that the pair is technically oversold in the near term. As for the Bollinger Bands, the price moved out of the upper band so a trend continuation is possible. In conclusion, we think market will be bullish as the pair is testing the 1.2843 resistance. On the upside, the pair could push lower toward 1.2900 if that resistance fails.

Resistance: 1.2843, 1.2939

Support: 1.2770, 1.2682, 1.2575, 1.2462

Economic Data:

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Market Focus

Wall street three major indexes ended sharply lower on Wednesday, extending recent losses as Ukraine declared a state of emergency and the U.S. State Department said the possibility of a Russian invasion of Ukraine remained looming. Hence, as tensions escalate, the Dow is also facing a correction. Despite rising tensions and no sign the Russians will back down, the White House said President Joe Biden has no intention of sending U.S. troops to fight in Ukraine. However, the United States has taken some action, imposing further sanctions on Nord Stream 2 AG, the company responsible for the construction of Russia’s Nord Stream 2 gas pipeline, aimed at limiting Russia’s ability to raise money from the West. Meanwhile, the European Union is scheduled to hold an emergency summit on Thursday to discuss Russia’s next steps after its entry into Ukraine. At the end of the market, the Dow Jones Industrial Average fell  1.38% to 33,131.76 points, the S&P 500 index lost 1.84% to 4,225.50 and the Nasdaq Composite Index dropped 2.57% to 13,037.49 points.

10 sectors in the S&P 500 ended lower, with the consumer discretionary falling the most, down 3.42%, followed by technology and industrials sectors, down 2.56% and 1.88%, respectively. The lone winner was the oil-related sector, energy, which rose 1.01%. Geopolitical tensions aside, a string of quarterly earnings from consumer discretionary companies including TJX Companies, Lowe’s Companies and Caesars Entertainment was in focus. TJX Corporation fell 5% after reporting fourth-quarter results, as higher costs and supply chain disruptions caused by the pandemic weighed on growth. Meanwhile, Lowe’s pared some of its gains as strong demand for home improvement tools and building materials boosted fourth-quarter results, but rose about 1% after issuing better-than-expected guidance. Caesars Entertainment reported a narrower quarterly loss as demand rebounded and revenue surged after pandemic restrictions eased. Its shares rose more than 3%.

Main Pairs Movement:

Investors were upbeat about developments in Eastern Europe on the day, but sentiment soured during U.S. trading hours, sending the greenback stronger against most of its major rivals. Ukraine has declared a state of emergency for 30 days starting on February 24, and U.S. intelligence reports have suggested that Russia could invade within the next 48 hours despite multiple Western sanctions on Russia. Additionally, several Ukrainian government websites went offline after blaming Russia for the DDoS attack.

EUR/USD remained in a consolidating range around 1.1300, slowly heading south to hit weekly lows.

GBP/USD also weakened below 1.35800 and returned to consolidation area. On the other hand, commodity-linked currencies were lower, but maintained their intraday gains. AUD/USD rose for a third day, hitting a daily high of 0.72838, but then pared gains to settle near 0.7230.

The safe-haven Swiss franc and Japanese yen edged higher against the dollar, with gold continuing its gains and holding above the 1900 level.

On the other hand, oil prices closed higher again, with WTI up 0.73% and Brent up 0.66%.

Technical Analysis:

EURUSD (4-Hour Chart)

The EUR/USD pair edged higher on Wednesday, extending its previous rally from a weekly low that touched yesterday amid risk-on market environment. The pair preserved its bearish momentum and touched a daily low in early European session, but then started to rebound back to 1.1350 area to erase all of its daily losses. The pair is now trading at 1.1333, posting a 0.08% gain on a daily basis. EUR/USD stays in the positive territory amid weaker US dollar across the board, as the upbeat market mood make it difficult for the greenback to find demand. However, the US and several European leaders both announced sanctions against Russia, therefore developments in Eastern Europe might limit the losses for the greenback. For the Euro, hawkish comments by ECB’s Board member R.Holtzmann has lent support to the EUR/USD pair, as he said that it’s possible for ECB to hike rates before ending bond purchases.

For technical aspect, RSI indicator 47 figures as of writing, suggesting that bear is preserving strength as the RSI is moving south. As for the Bollinger Bands, the price retreated back to the moving average, which indicates that the downside traction could persist. In conclusion, we think market will be slightly bearish as long as the 1.1382 resistance line holds. Tensions between Russia and Ukraine will remain to be market focus.

Resistance:  1.1382, 1.1465

Support: 1.1284, 1.1196, 1.1132

GBPUSD (4-Hour Chart)

The pair GBP/USD declined on Wednesday, lacking further strength to extend the rally from one-week lows amid dovish BoE comments. The pair was flirting with 1.3580~1.360 area during Asian session, then started to see some selling and dropped towards 1.3570 level heading into American session. At the time of writing, the cable stays in negative territory with a 0.06% loss for the day, remaining under pressure on recovering US dollar. The sanctions announced by the US against Russia were not as harsh as feared by the market, weighing on safe haven assets and favored investors’ sentiment. For British pound, Bank of England Governor Andrew Bailey said that they have two-sided risks to their inflation forecasts and higher interest rates will also raise unemployment and slow growth. Therefore, the hawkish comment acted as a headwind for the cable and capped its upside.

For technical aspect, RSI indicator 43 figures as of writing, suggesting that downside is more favored as the RSI stays below the mid-line. For the Bollinger Bands, the price is moving out of the lower band, indicating a strong trend continuation. In conclusion, we think market will be slightly bearish as the pair failed to test the 1.3636 resistance, but the cable need a break below 1.3513 support to open the road for additional losses.

Resistance: 1.3636, 1.3680, 1.3737

Support: 1.3513, 1.3456, 1.3372

USDCAD (4-Hour Chart)

As the risk-on mood weighed on the safe-haven US dollar today, the pair USD/CAD came under bearish momentum and extended its slide from 1.2780 area. The pair suffered heavy losses most of the day and dropped to a weekly low below 1.2690 level, now bouncing back slightly to recover some of its daily losses. USD/CAD is trading at 1.2730 at the time of writing, losing 0.32% on a daily basis. The new economic sanctions on Russia were not as bad as market’s expectation, easing the concerns about Russia/Ukraine conflict and disfavored the safe-haven greenback. On top of that, surging crude oil prices also lend strong support to the commodity-linked loonie and undermined USD/CAD pair. WTI now bounces back to the $92.00 per barrel area, as concerns about a full-scale Russian invasion of Ukraine remain elevated and put negative pressure on future global oil supply.

For technical aspect, RSI indicator 48 figures as of writing, suggesting that upside is preserving some upside strength as the RSI starts to move north. As for the Bollinger Bands, the price move immediately back inside the lower band after moving out of it, which showed that upside momentum could be expected. In conclusion, we think market will be bullish as the rising RSI reflects bull signals. If the pair crosses above the moving average in Bollinger Bands, the upper band will becomes the profit target.

Resistance: 1.2778, 1.2843

Support: 1.2665, 1.2575, 1.2460

Economic Data:

Market Focus

Wall street three major indexes tumbled on Tuesday, with the S&P 500 confirming a correction, as the Ukraine-Russia crisis unnerved investors after Russian President Vladimir Putin recognized two expanded borders of Luhansk and Donetsk and ordered troops to the area. In addition, the U.S. outlined new sanctions to prevent Russia from opening up more territory in Ukraine, turning hope into despair and fueling a climate of insecurity. Regarding sanctions, Biden said the US has no intention of fighting Russia. He said the sanctions targeted Russian banks and sovereign debt, among others. At the end of the market, the Dow Jones Industrial Average fell  1.42% to 33,596.61 points, the S&P 500 index lost 1.01% to 4,304.76 and the Nasdaq Composite Index dropped 1.23% to 13,381.52 points.

Eleven sectors in the S&P 500 all ended lower, with the consumer discretionary falling the most, down 3.04%, followed by energy and material sectors, down 1.53% and 1.38%, respectively. In the consumer discretionary sectors, Home Depot slumped more than 8% despite better-than-expected fourth-quarter results. Home Depot reported fourth-quarter earnings of $3.21 on revenue of $35.72 billion and comparable sales of 8.1%. The energy sector was dragged down by a drop in oil prices, which retreated from session highs. Pioneer Natural Resources, APA and Devon Energy were the hardest-hit stocks in the energy sector, all down more than 3%. Big tech stocks such as Apple, Amazon, Microsoft, Alphabet and Facebook ended lower, but with smaller losses.

Main Pairs Movement:

The geopolitical tension between Russia and Ukraine continued to ferment, and the three major Wall Street stock indexes continued to fluctuate and fell. Investors paid more attention to defensive sectors and safe-haven products such as bonds and gold.

EUR/USD remains in the consolidated range around 1.1350, so does GBP/USD, and it settles around 1.3560. USD/CAD retreated sharply before the close, closing around 1.2740, while AUD/USD rose for the second day in a row, closing around 07220.

The safe-haven Swiss franc and Japanese yen edged lower against the greenback, while gold prices continued to rise and topped $1,914 an ounce intraday, but then retreated to settle at $1,898.

On the other hand, oil prices faced the selling pressure, with WTI lost 2.49% and closing at $91.60 a barrel and Brent lost 0.6% and closing at $96.84 a barrel.

Technical Analysis:

EURUSD (4-Hour Chart)

The EUR/USD pair advanced on Tuesday, ending its two-day slide that dropped to 1.1290 area amid improving market mood and upbeat economic data. The pair was trading lower and touched a one-week low in early European session, but then advances to 1.1350 area to erase all of its daily losses. The pair is now trading at 1.1344, posting a 0.33% gain on a daily basis. EUR/USD stays in the positive territory amid weaker US dollar across the board, as Ukraine president Volodymyr Zelenskyy’s comment lend some support to market sentiment and disfavored the greenback. He said that he believes there would not be war nor a wider escalation between Russia and Ukraine. For the Euro, the German IFO Business Climate Index came at 98.9 in February, which beat market’s expectations of 96.5 and acted as a tailwind for the EUR/USD pair.

For technical aspect, RSI indicator 50 figures as of writing, suggesting that the pair is lacking directions at the moment. As for the Bollinger Bands, the price rose from the lower band and touched the moving average, which indicates a continuation of upside action. In conclusion, we think market will be slightly bullish as long as the 1.1304 support line holds. Investors will keep eyeing on the Russia/Ukraine tensions.

Resistance:  1.1382, 1.1465

Support: 1.1304, 1.1284, 1.1132

GBPUSD (4-Hour Chart)

The pair GBP/USD declined on Tuesday, coming under selling pressure and extending the slide that start yesterday despite improving market mood. The pair was surrounded by bearish momentum most of the day, failing to stage a rebound in early European session and retreated to 1.3550 area amid renew selling. At the time of writing, the cable stays in negative territory with a 0.18% loss for the day, remaining under pressure on mixed Russia/Ukraine developments. The weaker US dollar failed to pushed the cable higher, as UK PM Boris Johnson formally announce economic sanctions against Russia for a breach of international law. This has made the British pound the worst performing G10 currency on the day. For British pound, Bank of England Deputy Governor Dave Ramsden said that some further policy tightening seems likely to be need in the near term. The hawkish comment might limit the losses for the cable.

For technical aspect, RSI indicator 43 figures as of writing, suggesting that downside is more favored as the RSI stays below the mid-line. For the Bollinger Bands, the price move immediately back inside the lower band after moving out of it, indicating a possible upside traction for cable. In conclusion, we think market will be bullish as the pair might attract some dip-buying, but a break above 1.3636 resistance is needed for the cable to edge higher.

Resistance: 1.3636, 1.3739

Support: 1.3513, 1.3456, 1.3372

USDCAD (4-Hour Chart)

As the market sentiment turned slightly upbeat on Tuesday, the pair USD/CAD witnessed some bearish momentum and failed to extend previous day’s rally amid renewed US dollar weakness. The pair flirted with 1.2750~1.2765 area during Asian session, then started to see fresh selling and refreshed its daily low around 1.2720 level. USD/CAD is trading at 1.2737 at the time of writing, losing 0.13% on a daily basis. Market concerns about the escalating situation in Ukraine had eased after a Kremlin spokesperson said that Russia is still open to diplomacy and has an interest in that. Therefore, the news driving flows away from safe-haven greenback and weighed on USD/CAD pair. However, falling crude oil prices should limit the downside for the pair as WTI retreated to the $91.00 per barrel area. But expectations for a disruption in global oil supply might keep lending support to the black gold.

For technical aspect, RSI indicator 51 figures as of writing, suggesting that upside is gaining some upside strength as the RSI starts to head north. As for the Bollinger Bands, the price bounced back from the moving average, which showed that a trend reversal could be expected. In conclusion, we think market will be bullish as the firmer RSI line keeps buyers hopeful. if the pair manage to conquer the 1.2778 resistance, further upside could be expected.

Resistance: 1.2778, 1.2829

Support: 1.2681, 1.2575, 1.2461

Economic Data:

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