Market Focus

Stocks declined Tuesday on intensifying tension between the West and Russia over Ukraine, a standoff that leads investors to seek the relative safety of bonds and gold. Equities in Japan, Australia and South Korea fell, while U.S. futures pointed to a lower open when Wall Street trading resumes later following a holiday Monday.

President Vladimir Putin announced he’s recognizing two self-proclaimed separatist republics in eastern Ukraine, a dramatic escalation in Russia’s standoff with the West as the U.S. and its allies continue to warn it could soon invade its neighbor.

Those fears were likely heightened by the detail of the decrees signed by Putin, including an order for the Defense Ministry to send what he called “peacekeeping forces” to the breakaway regions. There were no details so far on how many troops might go in, or when, but Russia has previously accused Ukraine of having a significant deployment of its own soldiers on the line of contact with the separatists.

While Russia will argue that Putin’s recognition of the separatist regions gives a legal basis for the presence of its troops, the move will likely fuel U.S. and European concerns that Moscow is moving to take control of territory internationally recognized as part of Ukraine, and would put his forces closer to direct confrontation with Ukrainian soldiers.

“The question is now whether the U.S. and its partners are ready to pursue dialog in these new conditions,” said Andrey Kortunov, head of the Kremlin-founded Russian International Affairs Council. “We can say the worst hasn’t happened — a major new war hasn’t started, at least for now — but after the recognition we’re likely to see Russian troops deployed up to the border with the rest of Ukraine and this will be seen as an act of aggression with all the consequences.”

Main Pairs Movement:

Risk-off mood took over financial markets at the start of the week amid escalating geopolitical tensions in Eastern Europe. The greenback managed to advance against its high-yielding rivals but lost ground against safe-haven ones.

Mid US-afternoon on Monday, Russian President Vladimir Putin recognized Donetsk and Luhansk in Eastern Ukraine as independent states signed a decree “on friendship and cooperation.” The world sees this decision as the first step towards an invasion, which also invalidates talks with Western nations.

The Euro pair dived below 1.1300 in the early Asian session and now hovers around the 1.1310 levels. Cable fell over 1.3600, now trades at 1.3590. Commodity-linked currencies traded mixed against greenback for another day, as gold pushed past $1,910 a troy ounce amid demand for safety, and crude oil prices continue to climb on disruption fears. WTI now changes hands at $92.40 a barrel, while Brent at $97.30.

Technical Analysis:

EURUSD (4-Hour Chart)

The EUR/USD pair advanced on Monday, rebounding from 1.1310 area amid recovering market mood. The pair saw fresh buying and touched a daily high near 1.1390 mark in early European session, but failed to preserve its bullish strength while surrendering most of its intraday gains. The pair is now trading at 1.1333, posting a 0.13% gain on a daily basis. EUR/USD stays in the positive territory amid weaker US dollar across the board, as the news reported that French President has arranged a meeting between US President Joe Biden and Russian president Vladimir Putin this week boosted market sentiment and weighed on the greenback. For the Euro, the better-than-expected Eurozone PMI data released today acted as a tailwind for EUR/USD pair, showing a rebound in service sector sentiment and falling Omicron infection rates.

For technical aspect, RSI indicator 43 figures as of writing, suggesting bear movement ahead. As for the Bollinger Bands, the price is now struggling around the lower band, which indicates that the pair remain directionless. In conclusion, we think market will be slightly bearish as the pair might test the 1.1307 support. The continuing escalation in violence in Ukraine’s Donbass region could keep weighing on EUR/USD, and the pair could extend its slide toward 1.1300 after breaking that support.

Resistance:  1.1396, 1.1465

Support: 1.1307, 1.1284, 1.1132

GBPUSD (4-Hour Chart)

The pair GBP/USD edged higher on Friday, retreating toward 1.3600 level and lost its upside traction amid renewed concerns about tensions between Russia and Ukraine. The pair was pushed higher to near 1.3640 mark by the positive shift witnessed in risk sentiment, but then dropped to 1.3600 area amid renew selling. At the time of writing, the cable stays in positive territory with a 0.22% gain for the day, lacking upside momentum. The weaker US dollar lend support to the cable, but the news that US received information suggesting that Russia was preparing for military action against Ukraine might limit the losses for greenback. For British pound, the UK Preliminary Services PMI jumps to 60.8 in February, which surpassed market expectations of 55.5 and underpinned the GBP/USD pair.

For technical aspect, RSI indicator 56 figures as of writing, suggesting that upside is more favored as the RSI stays above the mid-line. For the Bollinger Bands, the price is now rising towards the upper band again after touching moving average, indicating a possible upside traction for cable. In conclusion, we think market will be bullish as the pair might re-test the 1.3633 resistance. A break above that level could open the road for near-term gains.

Resistance: 1.3633, 1.3680, 1.3737

Support: 1.3583, 1.3513, 1.3372

USDCAD (4-Hour Chart)

As the concerns about conflicts between Russia and Ukraine eased earlier today, the pair USD/CAD witnessed some selling and remained under pressure on US dollar weakness. The pair dropped to a daily low below 1.2730 level in early European session, then rebounded towards 1.2760 area to recover most of its daily losses. USD/CAD is trading at 1.2745 at the time of writing, losing 0.07% on a daily basis. Positive news on Ukraine-Russia fears has favored the market mood, as US President Biden agreed to participate the meeting with Russia President Putin later this week if an invasion hasn’t happened. On top of that, rising crude oil prices also undermined the  USD/CAD pair, now WTI is trading flat in the $92.00 per barrel area. But traders continue to weigh ongoing escalation in the Russia/Ukraine crisis, which might disrupt global oil supply.

For technical aspect, RSI indicator 57 figures as of writing, suggesting that upside is preserving strength as the RSI is approaching 60. As for the Bollinger Bands, the price is now climbing towards the upper band, which showed that upside momentum could be expected. In conclusion, we think market will be bullish as the short-term technical outlook for USD/CAD remains bullish with the RSI indicator on the four-hour chart holding above 50.

Resistance: 1.2778, 1.2831

Support: 1.2681, 1.2575, 1.2462

Economic Data:

Dear Client,

To provide our clients with a wealth of trading options, VT Markets will launch new CFDs on Index Futures on Feb 28th, 2022.

The specifications of the new products as shown in the table below.

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

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Market Focus

Stocks extended declines Friday to close a second straight week in negative territory with geopolitical tensions intensifying to contribute to a further risk-off tone in markets. Dow Jones closed down 0.68% to 34,079.12 after erasing 1.8% Thursday for its worst day in nearly three months, and it also closed at its lowest level since September. The Nasdaq Composite shed 1.23% to 13,548.07 — its lowest level since January. Meanwhile, the CBOE Volatility Index (VIX), or “fear gauge,” spiked back to hover near January 28^th highs.

Just 7 weeks ago, Zhenro Properties Group Ltd had announced plans to redeem a perpetual bond and claimed that one of its units had secured a 9.14 billion yuan ($1.44 billion) credit line from state-owned Bank of China Ltd. Zhenro’s short-dated bonds were trading near 80 cents on the dollar, compared with 17 cents for embattled property giant China Evergrande Group.

Now Zhenro has become the latest developer to warn it may not meet its obligations, an U-turn that’s extreme even by the standards of an industry where negative surprises have multiplied over the past year.

The company’s sudden and mysterious slide into distress is raising investors’ concerns toward many of its peers, overshadowing efforts by the Chinese government to curb financial contagion in a real estate sector that generates nearly 30% of economic output. Speculation about a piotential default at Zhenro helped spark a broad slump in Chinese developer bonds last week, driving up financing costs for companies that need to repay almost $100 billion of debt this year.

Main Pairs Movement:

The dollar traded within tight ranges versus major currencies as a holiday-muted week got underway in the Asia-Pacific on Monday, with little sign of risk-off sentiment amid geopolitical tensions over Ukraine. The greenback trades at familiar levels with most of its major peers, while the Aussie was quoted lower, following a local naval spat with China.

EUR/USD opened Monday at 1.1315, around 4 pips lower than its Friday close but soon bounced back to around 1.1320. GBP/USD started the week with a 10-pip rally in the first hour, trading at 1.3591 as of writing. AUD/USD eases 0.2% to 0.7164; pair finished last week 0.6% higher for its third weekly advance. USD/JPY falls 0.1% to 114.92 after finishing last week 0.4% lower

Gold surged a significant $7 per troy ounce in few minutes after its open due to the rising military conflict possibility between Ukraine and Russia. Crude oil prices as well surged strongly, with WTI traded at $92.60 a barrel, up 0.65% than Friday’s close, and Brent at $94.80 a barrel, up 1.24%.

Technical Analysis:

EURUSD (4-Hour Chart)

The EUR/USD pair declined on Friday, retreating to 1.1350 area amid the mixed headlines surrounding the tensions between Russia and Ukraine. The pair flirted with 1.1365~1.1375 area during first half of the day, then started to see fresh selling after European session started and dropped to a daily low near 1.1340 mark. The pair is now trading at 1.1349, posting a 0.08% loss on a daily basis. EUR/USD stays in the negative territory amid risk-off market mood, as Russia claimed Ukraine for committing war crimes in Donbas meanwhile US Secretary of State told the UN Security Council that Russia was using it as an excuse to start an attack on Ukraine. But the falling US Treasury bond yields should cap the upside for the greenback. For the Euro, hawkish comments from ECB policymaker Peter Kazimir should limit the losses for EUR/USD pair, as he supported an axing of QE in August and immediate rate hike thereafter.

For technical aspect, RSI indicator 43 figures as of writing, suggesting bear movement ahead. As for the Bollinger Bands, the price is now hovering around the lower band, which indicates that the downside traction should persist. In conclusion, we think market will be slightly bearish as the pair is heading to test the 1.1323 support. The pair could extend its slide toward 1.1300 below that level.

Resistance:  1.1396, 1.1465

Support: 1.1323, 1.1284, 1.1132

GBPUSD (4-Hour Chart)

The pair GBP/USD edged lower on Friday, lacking bullish strength after supporting by upbeat UK Retail Sales data in early European session. The pair climbed higher to a one-week high above 1.3640 mark, but failed to preserve its upside momentum and dropped towards 1.3600 level during American session. At the time of writing, the cable stays in negative territory with a 0.08% loss for the day, rebounding slightly from a daily low. The stronger US dollar weighed on the cable as safe-haven flows dominated the financial markets today, meanwhile investors keep digesting the latest developments surrounding the Russia-Ukraine conflict. For British pound, the stronger-than-expected UK January Retail Sales showed sales were up 1.9% in January, which surpassed market expectations of 1.0% and lend some support to the GBP/USD pair.

For technical aspect, RSI indicator 57 figures as of writing, suggesting that upside is more favored as the RSI stays above the mid-line. But for the Bollinger Bands, the price is now dropping towards the moving average, indicating a continuation of bearish trend. In conclusion, we think market will be bearish as long as the 1.3633 resistance line holds. the pair already broke above the previous resistance at 1.3612, the pair will need to rise above that level and starts using it as support for some short-term gains.

Resistance: 1.3633, 1.3739

Support: 1.3513, 1.3456, 1.3372

USDCAD (4-Hour Chart)

As the safe-haven flows dominated the financial market on Friday, the pair USD/CAD witnessed some some dip-buying and capitalize on renewed US dollar strength. The pair dropped to a daily low near 1.2675 mark during European session, then staged a goodish rebound to recover most of its daily losses. USD/CAD is trading at 1.2749 at the time of writing, rising 0.32% on a daily basis. Signs of escalating fighting in Easter Ukraine and FOMC member Charles Evan’s comment both lifted the pair higher, he said that Fed could do a substantial repositioning of its policy to deal with high inflation. On top of that, falling crude oil prices also weighed on the commodity-linked loonie and acting as a tailwind for USD/CAD, as hope for a diplomatic solution to Ukraine conflict and an agreement for the Iran/US deal both add pressure on the black gold.

For technical aspect, RSI indicator 59 figures as of writing, suggesting that upside is preserving strength as the RSI is approaching 60. As for the Bollinger Bands, the price is now moving out of the upper band, which showed that a strong trend continuation could be expected. In conclusion, we think market will be bullish as the pair bounces from three-week-old support and heads to test the 1.2778 resistance.

Resistance: 1.2778, 1.2829

Support: 1.2665, 1.2575, 1.2461

Economic Data:

Dear Client,

As part of our commitment to provide the best reliability and service to our client, the trading hours of certain products will be adjusted as follows due to the maintenance.

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Hedging is a process to protect the position we take in a currency pair (referred to as an asset) from the risk of loss caused by unexpected events. It is a method that involves opening two opposite positions, namely, Buy and Sell, with the same lot on a currency pair/asset.

For example, you have a bias that GBP/USD will weaken, then open a Sell GBP/USD position of 0.25 lots at 1.6000, and now the price has increased by 25 pips and is at 1.6025. So, to lock in your losses, you open a Buy GBP/USD position of 0.25 lots at 1.6025.

If it turns out that your previous analysis is correct and GBP/USD weakens again, you can close the Buy GBP/USD position of 0.25 lots at 1.6025 at any loss and leave the Sell GBP/USD position of 0.25 lots at 1.6000 open to get a profit in total.

The downside is, sometimes a trader will find it difficult to determine which position to close, especially if the market conditions were uncertain when they were hedging.

However, if you have mastered this method, it can be an extraordinary strategy to get a good profit.

Illustration: A trader has a bullish bias towards an asset and then enter a BUY position. After some time, the trader analyzes that there is a possibility of a correction, and then decides to keep his BUY position and open a SELL order. After some time, the price seems to be going down, so the Trader takes profit from the BUY order they opened earlier so that they get the maximum profit from the Sell position.

By doing the method mentioned above, which is using hedging to take a minor correction to the increase in an asset, a trader has locked the profit they got in the first place. To wait to the market to provide more information about where it will go next. If the analysis is gone wrong, the trader has various options to decide.

Risk of Using the Hedging Strategy

The hedging strategy itself does not mean that we eliminate the risk factor from our trade. Don’t forget that a hedging strategy has a cost associated with it. An example is paying a larger spread/commission than usual. Consider this and more before using the hedging strategy.

So, before you decide to use hedging, you should ask yourself if the potential benefits justify the costs you pay. Remember, the purpose of hedging is not to make money from it but as an attempt by traders to protect against losses.

The costs of hedging, be it trading fees (spreads/commissions) or the potential for losing more profits from using the opposite position, are unavoidable.

It is better if the hedging strategy is carried out by individuals who already understand the risk of hedging and can read the market structure well.

If someone uses a hedging strategy without any basic understanding, there’s a possibility that the trader might be trapped in endless hedging. This means hedging will continue to open and close and get wider and wider, which could result in the reduction of equity and balance.

Since hedging is quite difficult, try to make friends with time and statistics. Practice strict risk management so that your account can grow optimally in the long term.

Market Focus

Wall street three major indexes tumbled on Thursday, with the S&P 500 posting its biggest daily percentage drop in two weeks as investors turned to defensive sectors and safe havens such as bonds and gold amid heightened geopolitical tensions between Washington and Russia over Ukraine. Over time, the situation escalated, causing diplomatic talks to break down. Western countries believe that Russia is not only not retreating, but is preparing to invade. Russia expelled U.S. officials from the embassy and accused Washington of ignoring its security demands, while U.S. President Joe Biden accused Moscow of creating drama to justify the invasion. In addition, the U.S. Secretary of Defense reports that Russian troops are approaching the Ukrainian border. At the end of the market, the Dow Jones Industrial Average fell  1.78% to 34,312.03 points, the S&P 500 index lost 2.12% to 4,380.26 and the Nasdaq Composite Index dropped 2.88% to 13,716.72 points.

Nine of the 11 sectors in the S&P 500 ended lower, with the technology sector falling the most, down 3.06%, followed by communications services and consumer discretionary, down 2.96% and 2.57%, respectively. The only winners were consumer staples and utilities, which rose 0.91% and 0.06%, respectively. The best performers on the Dow Jones Industrial Average were Walmart, which rose 4.01%. Meanwhile, Cisco Systems added 2.72% and Coca-Cola added 2.00%. Top performers on the S&P 500 were Newmont Goldcorp Corp, up 5.40%, and Sealed Air Corporation up 5.00%. In terms of tech sector, the large-cap companies all lost ground, with Apple dropped 2.13%, Tesla dopped 5.09%, Facebook down 4.08% and Nvidia slipped 7.56%. In addition, in the financial sector, large banks including JPMorgan Chase, Morgan Stanley and Bank of America have lost ground as risk aversion pushes bond yields lower. Goldman Sachs and Wells Fargo fell even after posting their upbeat outlooks.

Main Pairs Movement:

Tensions between Russia and Ukraine continued to dominate headlines and financial markets, spurring demand for safe-haven assets, even as speculative interest moved away from the dollar. Major currency pairs held on to familiar levels earlier on Thursday after the two countries accused each other of being responsible for some shelling in the Donbas region. Finally, the DXY only gained 0.13% as the US 10-year yield dropped 3.28%, and the precious metal gained 1.53% to break above the 1,900 level for a fresh 2022 high.

The currency against the greenback held on to familiar levels against the dollar, despite a big volatility on the day following news of Ukraine throwing grenades into the Luhansk region. EUR/USD remains stuck at around 1.1350 and stayed in consolidated range. Sterling has better performance than euro and continued to move northwards, breaking the 1.35 level and closing at 1.36155. The Swiss franc and yen hit fresh weekly highs against their U.S. counterparts on safe-haven demand, while commodity-linked currencies remained near opening levels.

Crude oil prices were lower, weighed down by weakness in equities, at the end of the market, the WTI closed at $91.65 a barrel and Brent at $92.91 a barrel.

Technical Analysis:

EURUSD (4-Hour Chart)

The EUR/USD pair edged lower on Thursday, seeing two-way price action amid the geopolitical headlines about rising risk of a war between Russia and Ukraine. The pair were trading flat at the start of the day and dropped to a daily low below 1.1330 level in mid Asian session, now has bounced back to erase some daily losses. The pair is now trading at 1.1359, posting a 0.11% loss on a daily basis. EUR/USD stays in the negative territory amid risk-off market mood, as  the news during Asian session reported that Ukraine fired mortar shells and grenades on Luhansk People’s Republic (LPR) locations. But Ukraine denied the accusations and blamed pro-Russia separatist forces for the shelling. For now, investors will remain their attention on the geopolitical conflict, which might keep adding pressure on EUR/USD pair.

For technical aspect, RSI indicator 49 figures as of writing, suggesting that there is no obvious direction for the pair now. As for the Bollinger Bands, the price is dropping towards the moving average, which indicates that the downside traction should persist. In conclusion, we think market will be slightly bearish as long as the 1.1396 resistance line holds. Bears may take control if the pair breaks below the 1.1284 support level.

Resistance:  1.1396, 1.1465

Support: 1.1284, 1.1196, 1.1132

GBPUSD (4-Hour Chart)

The pair GBP/USD advanced on Thursday, continuing to rebound from a two-week low below 1.3500 mark amid the emergence of fresh US dollar selling. The pair was trading higher to near 1.3640 mark after touching a daily low during Asian session, now flirting with 1.3610~1.362 area. At the time of writing, the cable stays in positive territory with a 0.31% gain for the day, remaining its upside traction. The retreating US bond yields undermined the US dollar and acted as a tailwind for the cable, as investors digest contradicting geopolitical headlines between Russia and Ukraine. US President Biden also said earlier that Russia attack on Ukraine is possible in next several days. For British pound, the rising expectations for additional interest rate hikes this year by the Bank of England lend support to the nation’s currency.

For technical aspect, RSI indicator 66 figures as of writing, suggesting that upside is more favored as the RSI stays above the mid-line. As for the Bollinger Bands, the price is now moving alongside the upper band, indicating a continuation of bullish trend. In conclusion, we think market will be bullish as the pair already broke above the previous resistance at 1.3612, if the pair could preserve consistent strength and starts using that level as support, short-term gains could be expected.

Resistance: 1.3612, 1.3680, 1.3739

Support: 1.3513, 1.3456, 1.3372

USDCAD (4-Hour Chart)

As the tensions between Russia and Ukraine escalated, the pair USD/CAD witnessed some fresh selling and failed to capitalize on its modest intraday gains. The pair surged to a daily high above 1.2730 level during Asian session, but then dropped towards 1.2700 mark and surrender most of its intraday’s gains. USD/CAD is trading at 1.2697 at the time of writing, rising 0.02% on a daily basis. Despite the Russia-Ukraine conflict continues to intensify, the market mood has slightly recovered as the latest satellite image showed that Russia has pulled back some equipment from the Ukraine border. However, surging crude oil prices keep supporting the commodity-linked loonie and acting as a headwind for USD/CAD, as reports of firing grenades and mortars in a conflicted area in East Ukraine had pushed WTI back above $93.00.

For technical aspect, RSI indicator 44 figures as of writing, suggesting bear movement ahead. As for the Bollinger Bands, the price is now dropping towards the lower band, which showed that downside traction could be expected for the pair. In conclusion, we think market will be slightly bearish as the pair might re-test the 1.2665 support. If Russia does invade Ukraine in the coming days like what US President Joe Biden worried, oil prices would likely climb higher towards $100 per barrel.

Resistance: 1.2778, 1.2843

Support: 1.2665, 1.2575, 1.2461

Economic Data:

Dear Client,

Warmly reminds you that the component stocks in the stock index spot generate dividends. When dividends are distributed, VT Markets will make dividends and deductions for the clients who hold the trading products after the close of the day before the ex-dividend date.

Indices dividends will not be paid/charged as an inclusion along with the swap component. It will be executed separately through a balance statement directly to your trading account, the comment for which will be in the following format “Div & Product Name & Net Volume ”.

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Global uncertainty has intensified because of the danger of the Russian invasion of Ukraine. Given the possibility of an invasion on Wednesday, US Secretary of State Anthony Blinken ordered the closure of the US Embassy in Kyiv to temporarily relocate to Lviv, a city in western Ukraine on Monday.

The drama surrounding the buildup of soldiers on the Russian-Ukrainian border has prompted market participants to seek a safe-haven, put pressure on the stock market due to the high-risk element, and pushed world oil prices back up to $95/barrel.

Market are awaiting word on whether the invasion will occur tomorrow or whether the Russian military exercises are only a protest against the US plans to create a military base in Ukraine. Russia’s capital, Moscow, will not be secured if Ukraine joins NATO, as it is too close to a planned military facility in Ukraine.

There are divergent perspectives among world leaders:

Soheil Al-Mazrouei, the UAE’s Minister of Energy, stated that a Russian invasion of Ukraine is improbable.

On Monday, the UK Prime Minister warned that an attack on Ukraine might occur within 48 hours.

However, Ukraine President Volodymyr Zelenskyy’s response was as follows: “We are threatened with war, and they have set a date for a major invasion.” However, he noted that this is not the first time, and their intelligence agencies are aware of Russian forces’ actions.

Similarly, there is a statement from the Russian side, in which the Kremlin dismisses US warnings of an impending strike as “hysteria” and “absurdity”.

According to recent developments, Russia has ordered the departure of its forces.

This uncertainty may result in significant fluctuation in certain pairs.

Our risk team is monitoring closely and would like to remind our investors to brace for more market volatility in the days and weeks ahead especially in oil and gold related products.

Oil and Gold prices will be the most impacted in the coming weeks.

Market Focus

US equities pared most of the earlier losses Wednesday afternoon after the Federal Reserve’s latest meeting minutes provided more clarity on the central bank’s thinking about addressing inflationary pressures. The S&P 500 turned slightly positive and recovered losses after dropping as much as 0.9% earlier. Dow Jones recbounded near 300 points from intraday low, closing merely 0.16% lower, while tech-heavy Nasdaq ended the day 0.11% lower, regained near 200 points from daily lows.

Federal Reserve officials concluded in January that they would start raising interest rates soon and were on alert for persistent inflation that would justify a faster pace of tightening. Minutes of the Jan. 25-26 Federal Open Market Committee meeting, released Wednesday, said most policy makers “noted that, if inflation does not move down as they expect, it would be appropriate for the Committee to remove policy accommodation at a faster pace than they currently anticipate.”

But the minutes preceded data since then showing a roaring job market and a further jump in inflation that’s spurred more hawkish bets in markets. Investors see at least 150 basis points of tightening in 2022, up from 75 basis points just a few weeks ago, as the evidence continues to show a bubbling economy that’s experiencing the fastest price growth in 40 years.

U.S. consumer prices rose to a four-decade high of 7.5% in January. In the labor market, employers added almost half a million new jobs last month despite record Covid-19 cases, and wages surged. Fed officials will have the February data in hand for both reports before it meets next month.

Main Pairs Movement:

The dollar Index edged further south on Wednesday, despite the release of upbeat US data and uncertainty amid Russian – Ukrainian border tensions. Government bond yields remained up the upper end of their weekly range, with the benchmark 10-year Treasury yield hovering above 2.00%. Also, the Fed released the FOMC meeting Minutes, which indicated that policymakers are willing to hike rates but did not mention a 50 bps move in March. US Retail Sales were up 3.8% in January, much better than anticipated, while Industrial Production in the same month surged by 1.4% vs the 0.4% expected.

EUR/USD trades around 1.1390, while GBP/USD flirts with 1.3600 amid the broad dollar’s weakness. The AUD/USD pair is also up, trading around 0.7200, while USD/CAD lags, hovering around 1.2670, capped by the crude oil prices weakness. Safe-haven currencies managed to advance against the greenback, with USD/CHF down to 0.9210.

Commodities posted mixed. Gold price regained $1,870 a troy ounce during Wednesday’s trades, recovering most of its Tuesday’s losses. On the other hand, the black gold retreated sharply from its daily high, with WTI trades around $90.60 a barrel, and Brent around $92.70.

Technical Analysis:

EURUSD (4-Hour Chart)

The EUR/USD pair edged higher on Wednesday, continuing to rebound towards 1.1400 area amid modest upbeat market sentiment. The pair started to see fresh buying in early Asian session and touched a daily high near 1.1395 mark during European session, then retreated below 1.1370 level amid rebounding US dollar. The pair is now trading at 1.1362, posting a 0.05% gain on a daily basis. EUR/USD stays in the positive territory amid weaker US dollar across the board, as investors remain mildly optimistic today, expecting the geopolitical tensions between Russia and Ukraine to ease. But hawkish Fed expectations and upbeat US Retail Sales data should help limit any further losses for the greenback. In Europe, Industrial Production in the euro area rises by 1.2% in December, surpassing market expectations of 0.3%.

For technical aspect, RSI indicator 51 figures as of writing, suggesting that there is no obvious direction for the pair now. As for the Bollinger Bands, the price continues to rise towards the upper band, which indicates that the upside traction should persist. In conclusion, we think market is consolidating in 1.1350~1.1400 area as RSI indicator lacks directional strength. The bullish side will become firmer if the pair breaks above the 1.1424 support level.

Resistance:  1.1424, 1.1465

Support: 1.1284, 1.1196, 1.1132

GBPUSD (4-Hour Chart)

The pair GBP/USD advanced on Wednesday, bouncing back from a two-week low below 1.3500 mark that touched yesterday. The pair was trading higher during Asian session and touched a daily high above 1.3580 level in early American session, preserving bullish traction for the second successive day. At the time of writing, the cable stays in positive territory with a 0.31% gain for the day, flirting with 1.3570~1.3580 area. The receding geopolitical tensions between Russia and Ukraine has lend some supports to the cable, but the data showing that US Retail Sales rise by 3.8% might limit the upside for GBP/USD. For British pound, the UK Consumer Prices Index (CPI) rises by 5.5% in January, which was higher than market’s expectation and strengthened the case for additional rate hikes this year by Bank of England.

For technical aspect, RSI indicator 58 figures as of writing, suggesting that upside is more favored as the RSI stays above the mid-line. As for the Bollinger Bands, the price is rising towards the upper band, indicating that the bullish momentum is gathering strength. In conclusion, we think market will be bullish as the RSI indicator heads towards 60, hinting at a buying interest by investors. If the pair breaks above the 1.3612 resistance and starts using that level as support, short-term gains could be expected.

Resistance: 1.3612, 1.3680, 1.3739

Support: 1.3513, 1.3456, 1.3372

USDCAD (4-Hour Chart)

As the market mood keeps swinging between risk-on/off, the pair USD/CAD witnessed downside momentum and extended its intraday losses amid renewed US dollar weakness. The pair was surrounded by bearish momentum most of the day, dropping to a daily low below 1.2670 level in late European session. USD/CAD is trading at 1.2743 at the time of writing, rising 0.13% on a daily basis. Despite yesterday’s news have eased the concern about tensions between Russia and Ukraine, US Secretary of State Blinken said on Wednesday that they continue to see Russian troops moving towards the border and caused a turnaround in market sentiment. On top of that, surging crude oil prices also acted as a headwind for USD/CAD, as WTI rebounded back above $94.00 amid confusion about a troop withdrawing by Russia.

For technical aspect, RSI indicator 43 figures as of writing, suggesting bear movement ahead. As for the Bollinger Bands, the price is now consolidating near the lower band, indicating that a continuation of downside traction could be expected. In conclusion, we think market will be slightly bearish as the pair might re-test the 1.2665 support. Meanwhile the hotter-than-expected Canadian CPI report will keep supporting the commodity-linked loonie.

Resistance: 1.2770, 1.2829

Support: 1.2665, 1.2575, 1.2461

Economic Data:

Market Focus Stocks advanced, while bonds fell with the dollar as speculation that geopolitical tensions could be easing overshadowed data showing inflation is still running hot. The equity market halted a three-day drop as Russian President Vladimir Putin announced a partial pullback of thousands of troops massed near the Ukrainian border. Tech shares led gains in the S&P 500, while energy producers joined a slump in oil. Dow Jones closed 1.22% higher to 34,988.84, while the Nasdaq Composite saw its best day in two weeks, advancing 2.53% to 14,139.76.

President Joe Biden said it remains possible that Russia will invade Ukraine because its troops remain in a “threatening position,” and said that the U.S. has not verified Moscow’s claims that it has withdrawn some forces.

“We should give the diplomacy every chance to succeed, and I believe there are real ways to address our respective security concerns,” Biden said at the White House on Tuesday. “To the citizens of Russia: You are not our enemy. And I do not believe you want a bloody, destructive war against Ukraine.”

Biden and his team have sought to deter a Russian invasion, which would plunge Europe into its biggest security crisis in decades and pose a new challenge for his embattled presidency. He said the U.S. stood ready to respond to a Russian attack with crippling economic sanctions, but warned Americans they could pay even higher fuel prices as a result. Russian President Vladimir Putin has repeatedly denied he intends to invade Ukraine, even while massing tens of thousands of troops as well as tanks, artillery and other equipment on the country’s borders. Biden said Russia now has about 150,000 troops in place around Ukraine.

Main Pairs Movement:

The sentiments improved on Tuesday as traders rushed to price in a de-escalation of the Russia-Ukraine tensions after the Russian Minister of Defense announced that some of the troops at the border would return to their bases. However, words from Russian President Vladimir Putin released during the American afternoon seemed not that cheering.  Putin said that he is not satisfied with assurances that Ukraine will not become a NATO member in the near future and wants the issue to be settled right now or soon through a negotiating process.

Demand for the dollar receded, but its decline was partially offset by renewed strength in government bond yields. The US benchmark 10-year Treasury yield rose to 2.05% on Tuesday.

The Euro pair settled in the 1.1360 region, while Cable lingers around 1.3540. Commodity-linked currencies advanced despite weakness of gold and crude oil prices. The AUD/USD pair regained 0.7150, NZD/USD recovered to 0.6640 levels, while Loonie trades around the 1.2720 price zone. Commodities plummeted, with gold nosediving to the current $1,850 area, and crude oil prices shed a good bunch of their recent gains, with WTI closing Tuesday at around $92.10 a barrel, and Brent at $93.36.

Technical Analysis:

EURUSD (4-Hour Chart)

The EUR/USD pair advanced on Tuesday, starting to rebound after the news earlier in the session showed that the tensions between Russia and Ukraine have eased. The pair consolidated in 1.1310~1.1320 area during Asian session, then started to see fresh buying and edged higher in early European session. The pair is now trading at 1.1325, posting a 0.19% gain on a daily basis. EUR/USD stays in the positive territory amid weaker US dollar across the board, as the safe-haven greenback struggles to find demand amid improving market sentiment. Russia’s Defense Ministry announced that Russian troops are returning to their bases following the completion of military drills, which support the market mood and acted as a tailwind for the EUR/USD pair. In Europe, Eurostat released the Q4 GDP growth figures today, which came in marke’s expectations of 0.3%.

For technical aspect, RSI indicator 41 figures as of writing, suggesting bear movement ahead. As for the Bollinger Bands, the price is falling from the moving average, which indicates that the pair could witness some short-term downside momentum. In conclusion, we think market will be bearish as long as the 1.1360 resistance line holds. But if the pair rises above that level and starts using it as support, it could target 1.1400 mark.

Resistance:  1.1360, 1.1465 Support: 1.1284, 1.1196, 1.1132

GBPUSD (4-Hour Chart)

The pair GBP/USD edged lower on Tuesday, failing to preserve its bullish momentum amid renewed US dollar strength. The pair touched a daily high above 1.3560 level in early European session, then lost its traction and dropped to the lowest level since February 1 during early American session. At the time of writing, the cable stays in negative territory with a 0.03% loss for the day, trying to bounce back slightly. The improving market mood has lend some supports to the cable, as some Russian troops are returning to their base meanwhile eased the tensions between Russia and Ukraine. But now investors awaits new developments on the Russia-Ukraine conflict to decide next direction for cable. For British pound, the UK Claimant Count Change showed that the number of people claiming unemployment-related benefits fell by 31.9K in January as against 43.3K previous.

For technical aspect, RSI indicator 44 figures as of writing, suggesting that downside is more favored as the RSI stays below the mid-line. As for the Bollinger Bands, the price is moving towards the lower band after crossing below the moving average, therefore the downside traction should persist. In conclusion, we think market will be slightly bearish as the pair is heading to test the 1.3513 support. But if market mood continues to improve, this could lift the pair up and a break above 1.3612 level could extend its recovery.

Resistance: 1.3612, 1.3680, 1.3739 Support: 1.3513, 1.3456, 1.3372

USDCAD (4-Hour Chart)

As the risk of geopolitical conflict eases, the pair USD/CAD witnessed upside momentum and recovered its intraday’s losses amid falling crude oil prices. The pair dropped to a daily low during European session, but then staged a goodish rebound towards 1.2760 area after American session started. USD/CAD is trading at 1.2743 at the time of writing, rising 0.13% on a daily basis. The positive turnaround in market mood weighed on the safe-haven US dollar and acted as a headwind for the major earlier in the session. But a sharp pullback in crude oil prices has lent strong support to USD/CAD pair, as WTI fell sharply from multi-year highs back to the $91.00 area. Russian President Vladimir Putin said that a decision on partial troop withdrawal had been taken, which eased the concerns about a potential disruption of oil supply.

For technical aspect, RSI indicator 55 figures as of writing, suggesting that the pair could remain its upside movement as the RSI start heading north. As for the Bollinger Bands, the price crossed above the moving average, indicating a possible upside traction for the pair. In conclusion, we think market will be slightly bullish as the pair is testing the 1.2778 resistance. If the pair break above that level, the bullish momentum could further get extended towards the 1.2850 area.

Resistance: 1.2778, 1.2829

Support: 1.2665, 1.2575, 1.2461

Economic Data: