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Posts: 20

1 (edited by Forex92 2022-02-25 07:50:42)

Topic: Daily Market Analysis by Forex92

USD/JPY drifts lower to the 115.20 region as attention remains focused on the Russia-Ukraine conflict.


After failing to profit from the overnight strong intraday recovery of roughly 130 pips from the 114.40 area, or the three-week low, the pair ran out of gas on Friday. The drop is mainly due to the US dollar's continued decline from its greatest level since June 2020, triggered by Russia's invasion of Ukraine on Thursday.

Despite recent geopolitical developments, the US dollar's status as the global reserve currency has been weakened. This, in turn, weighed on the USD/JPY, however the impact of the Putin-Zelenskyy meeting on a possible ceasefire looks muted.

Dmitry Peskov, Putin's press secretary, said Putin is willing to meet with Ukrainian President Volodymyr Zelenskyy provided he agrees to compromise on Russia's red lines. Moreover, reports claimed that Russian troops had halted most advances. This may weaken the Japanese yen and strengthen the USD/JPY.

Nonetheless, the potential of a new flare-up in the Russia-West Ukraine war should keep investors on edge. The USD/JPY pair should be approached with caution due to the mixed fundamental background. So the market will keep an eye on new developments in the Russia-Ukraine conflict.

The market now awaits the release of the Fed's favourite inflation gauge, the core PCE Price Index, and Durable Goods Orders. The statistics will likely be overshadowed by geopolitics and have little impact on USD price dynamics or the USD/JPY pair.

Re: Daily Market Analysis by Forex92

Forex Today: Markets have settled down for the time being, but brace yourself for another volatile day.

What to know on Friday, February 25:

The US Dollar Index (DXY) rose to its highest level since June 2020 at 97.73 before falling in the late American session. The DXY extends its corrective plunge as investors prepare for another volatile day. Later in the day, the European Commission will release its February sentiment survey, and the US Bureau of Economic Analysis will release its Personal Consumption Expenditures Price Index. The Russia-Ukraine conflict is likely to be the market's dominant driver into the weekend.

Following Russia's war on Ukraine, the West issued sanctions on Thursday. The EU, UK, and US did not cut Russia off from the SWIFT system, but said it was an option. Sanctions mostly omitted the Russian energy industry, reducing concerns about sanctions' impact on the global economy and inflation. "Today will be the hardest day," a Ukrainian government adviser said earlier in the day, citing Russia's plans to employ tanks to break into Kyiv. Also, President Zelenskyy claimed sanctions on Russia were insufficient.

The DXY was down 0.2 percent at 96.85, the 10-year US Treasury bond yield was unchanged at 1.96 percent, and the price of WTI was up 1.75 percent at 94.60. US stock index futures were also losing ground, indicating a cautious market tone.

After losing over 200 pips and having one of its worst days in months on Thursday, EUR/USD is bouncing back and trading over 1.1200.

Thursday, the GBP/USD plummeted to 1.3271, its lowest since late December, but recovered some of its losses. The pair was last up 0.4% at 1.3426.

Gold hit $1,974 on Thursday, its highest level since September 2020, before reversing course to settle flat at $1,900. Early Friday, XAU/USD resumed its upward trend toward $1,920.

On Thursday, the JPY outperformed riskier currencies including the EUR, GBP, and AUD, while the USD/JPY surged to around 115.50 due to broad USD gains. The pair extends gains but stays over 115.00.

Bitcoin dipped below $35,000 on Thursday, but benefited from the risk-reversal and finished above $38,000. Bitcoin/USD is up little early Friday but remains below $40,000 for now. Ethereum is trading near $2,600, having recovered from a multi-week low of $2,300 on Thursday.

3 (edited by Forex92 2022-02-28 09:36:13)

Re: Daily Market Analysis by Forex92

EUR/USD appears to be on the verge of challenging the 1.10 level this week - ING

The euro's losses have been limited so far, but ING analysts anticipate the EUR/USD could fall further as investors review the weekend's events.

Investors question if Europe will be willing to reduce Russian imports.
“There are reports that Europe is considering quotas/limits on Russian energy. That would mean far higher energy prices for Europe and worse growth forecasts.”

Wednesday sees the announcement of the February eurozone CPI (French CPI has already surprised on the upside). But given recent events, we doubt increased eurozone CPI/ECB hawkishness will be enough to reverse the EUR/USD negative bias.”


“Barring a major breakthrough in Ukraine-Russia talks, EUR/USD appears skewed to 1.10 this week.”

Re: Daily Market Analysis by Forex92

USD/CAD: Loonie's upside will be muted as markets respond to Ukraine's conflict – MUFG

The Ukraine crisis adds to the Bank of Canada's policy uncertainties. MUFG Bank's economists are still positive on the loonie, but the outlook is dimmer.

Expectations for a BoC rate hike cut ahead of Wednesday's meeting

“There is growing concern that rising oil prices would slow global development and lead to demand destruction. The Ukraine war is a stagflation shock. So higher prices are less favourable for oil currencies than if the global economy is strengthening.”

Because the BoC policy meeting coincides with the Ukraine conflict, its conclusion is unknown. We believe the near-term risks for Canadian rates are remain negative. While it is not our base case scenario, the BoC could delay hiking rates as early as this week. Even if the BoC raises rates, the new policy advice may seem more cautious than current market expectations of over 100bps hikes by summer.”

Re: Daily Market Analysis by Forex92

USD/INR Price News: Markets brace for further volatility as an expanding triangle forms

On Tuesday, the USD/INR pair opened with a negative gap around 75.30. The major fell on Monday after recovering its Thursday high of 75.82. On Tuesday, the asset is trading near the 50-period EMA of 75.34.

Hourly, USD/INR is building a widening triangle, causing violent price swings. Traders experience a lot of stop triggers because the broadening pattern is usually diverging. So huge swings in future trading sessions will keep investors alert.

The Relative Strength Index (RSI) (14) is below 40.00, signalling that the asset is no longer bearish.

The 50-period and 200-period EMAs are rising, indicating a bullish bias, but additional filters must corroborate.

To move higher, USD/INR needs to beat Tuesday's high of 75.38, which may take it to Monday's average traded price of 75.59 and Monday's high of 75.84.

Bears can take the lead if the major breaks below Monday's low at 75.25, then the 200 EMA at 75.12, then the February 22 peak at 75.00.

Re: Daily Market Analysis by Forex92

EUR/USD: Mildly offered near 1.1200 despite Ukraine-Russia conflict, German inflation, and ECB Managing Director Lagarde's eye on

EUR/USD starts March calmly, regaining intraday losses around 1.1200 by Tuesday's European session. Nonetheless, the major currency pair shows 0.10 percent daily losses, the first in three days, despite the USD's recovery.

Fears over the Russian invasion of Ukraine, as well as a cautious outlook for crucial data/events, may be contributing factors.

Concerning the hazards, the Kyiv-Moscow peace talks had finished without a resolution the day before but were maintained open for discussion. Amid the geopolitical concerns, Russia's condemnation of Western sanctions and armed incursion in Kyiv suggests that the US dollar is still a safe-haven asset.

Firmer US 10-year Treasury yields, up two basis points (bps) to 1.86 percent, help the currency recoup recent losses. The 10-year breakeven inflation rate from the St. Louis Federal Reserve (FRED) may have influenced the bond yields.

However, a 0.50 percent Fed rate hike in March seems unlikely, according to CME's FedWatch Tool, and Atlanta Fed President Raphael Bostic's views. "Today I am in favour of a 25 bps hike in March," Bostic stated on Monday. "The ECB should take gradual and deliberate steps in revising policy, so as not to smother the as yet incomplete recovery," said ECB policymaker Fabio Panetta, per Reuters.

Moving forward, traders will be watching geopolitical developments and statements by ECB President Christine Lagarde and US President Joe Biden for new direction. It will be interesting to see how the German headline inflation rate, the Harmonized Index of Consumer Prices, moves in the coming weeks.

Analyses

A horizontal zone from late November 2021 to early December 2021, around 1.1185-75, limits the EUR/USD pair's immediate downside. Even yet, a 13-day-old declining resistance line near 1.1300 stands in the way of a comeback.

Re: Daily Market Analysis by Forex92

Asian stock market: Drifts lower on Russia-Ukraine worries and Biden's State of the Union address

Amid multi-day high oil prices and tough sanctions on Russia, Asian markets diverge from US and European stock futures early Wednesday. Firmer US Treasury yields and positive US statistics may add to the gloom.

By press time, the MSCI Asia-Pacific ex-Japan index had fallen 0.60 percent, while the Nikkei 225 had fallen 1.70 percent.

Notably, Australian shares rose modestly in Q4 despite a stronger-than-expected 3.0% QoQ GDP and a -1.90% previous. South Korean equities followed suit, despite mixed industrial and service sector output numbers for January.

During his first State of the Union address, US President Joe Biden announced the Russian travel restriction. Plus, Biden mentions “self-reliance,” the power to battle inflation, and preferred equity futures. The unwinding of rate-hike bets also poses a problem for bears.

Despite global sanctions, Russia is determined to fulfil its secret ‘goal'. However, the presence of Ukraine-Russia peace negotiations gives merchants hope for a solution.

Since Biden's SOTU also attacks China, Chinese markets have fallen over 1% everyday

OPEC and allies led by Russia, known as OPEC+, are expected to adhere to their existing policy of boosting output by 400K barrels per day (BPD) per month in April, according to Reuters.

Next, news about Russia and Ukraine will be a primary driver for USD/CHF. The Fed Chair's bi-annual speech and the ADP Employment Change for February will also be key indicators for Friday's US Nonfarm Payrolls.

Re: Daily Market Analysis by Forex92

Gold Futures: Additional increases are expected in the near term

Open interest in gold futures markets surged by 13.3K contracts after three days of daily declines, according to CME Group. Instead, volume fell by roughly 25.7K contracts, maintaining the choppy activity.

Gold targets $2,000

Gold prices rose sharply on Tuesday, accompanied by increased open interest, indicating that further gains are likely in the near term. The moderate volume retreat may cause a correction before the uptrend continues.

Re: Daily Market Analysis by Forex92

Despite a cautious mindset and USD rise, the GBP/USD pair reclaims 1.3400

The GBP/USD pair has risen from Wednesday's low of 1.3272, as Fed chair Jerome Powell's testimony signalled a less hawkish than aggressive posture for March's monetary policy.

Earlier, risk-averse assets underperformed the dollar as market investors expected the Fed to raise interest rates by 50 basis points (bps) to counteract rising inflation.

Managing 40-year high inflation is no easy task, and the Fed would need to use a variety of quantitative instruments to reduce the CPI to 7.5 percent.

Moreover, the current Russia-Ukraine conflict has compelled market investors to maintain a risk-averse stance despite heightened uncertainty.

The pound has been performing strongly versus the greenback in the Asian session and is anticipated to continue in the European session as well.

The US dollar index (DXY) is trading in a narrow range of 97.46-97.58 on Thursday, as investors await the outcome of the Russia-Ukraine peace talks.

Re: Daily Market Analysis by Forex92

EUR/USD bears launch an assault towards 1.1100 on Ukraine, Fed news, US data, and ECB Meeting Accounts

The EUR/USD fell to 1.1100 early Thursday morning in Europe, its lowest level since May 2020.

However, a risk-off atmosphere coupled with a widening difference between the Fed and ECB policymakers' views weighed on the quotation the next day.

The previous day's market euphoria was boosted by anticipation of Russian-Ukrainian peace negotiations and a ceasefire. Moody's and Fitch cut Russia's rating, joining US President Joe Biden's threat to impose more sanctions on Moscow.

According to CME's FedWatch Tool, the probability of a 0.50 percent rate hike in March has increased. The CME's stated tool predicts a 0.50 percent hike in the benchmark rate in March, versus over 2% odds earlier. The market's recent optimism about a hawkish Fed may be tied to Fed Chair Powell's bi-annual hearing before the House Financial Services Committee.

Despite rising odds of a 0.50 percent rate hike in March, money market bets on a faster rate hike have dwindled recently, adding to the EUR/USD bearish triggers.

Even though Wall Street put on a display of optimism, S&P 500 Futures and US 10-year Treasury yields remained sluggish.

Moving on, today's ECB Monetary Policy Accounts show varied reactions to the Eurozone inflation statistics, albeit being around record highs. US data such as ISM Services PMI, Factory Orders, Nonfarm Productivity, etc. Another major factor will be the second edition of Fed Chair Powell's testimony and the Russia-Ukraine news.

Analyses

Despite being near the 1.1060 support line, EUR/USD stays in a short-term bullish chart pattern dubbed a falling wedge. The RSI's recent oversold bounces favoured the latest rally.

Unwinding the EUR/recent USD's weakness will be a 13-day-old declining trend line and the 61.8 percent Fibonacci Expansion (FE) of the pair's moves between September 2021 and February 2022, respectively.

If the weekly resistance line is breached, the 50-SMA and the wedge's upper line will be tested at 1.1235 and 1.1270.

Re: Daily Market Analysis by Forex92

EUR/USD is at risk of falling below 1.1000 — UOB

UOB Group FX Strategists believe EUR/USD will soon break the 1.1000 mark.

“EUR finished at 1.1064 in NY (-0.51%) but fell dramatically in early Asian hours. The EUR may soon break the main support at 1.1000. The next support is at 1.0965. Resistance is 1.1045, then 1.1075.”

“We have been bearish on EUR for almost 3 weeks now. We warned yesterday (03 Mar, 1.1120) that if EUR dithers at these oversold levels, the chances of a move to 1.1000 are rapidly dwindling. EUR finished at 1.1064 in NY but plunged in early Asian trade. A 1.1000 breach seems likely. The next important support level is at 1.0900, which if broken might lead to a further steep fall (there is a minor support at 1.0965). If EUR does not rise over 1.1125 (‘strong resistance' level was at 1.1145 yesterday), further decline is possible.

Re: Daily Market Analysis by Forex92

USD/INR Price Analysis: The Indian rupee's bears are closing in to a multi-day high at 76.50.

Bulls extend multi-day advances beyond 76.00 during early Friday morning European trade.

The USD/INR pair has been trading in an upward sloping triangle since late January, recently between 76.25 and 75.55.

Based on the bullish MACD indications and the quote trading above the 200-DMA, the bulls are likely to cross the 76.25 obstacle, pointing to a multi-day-old resistance line near 76.50.

A 76.60 high in 2021 is possible if overbought RSI circumstances persist.

Alternatively, USD/INR bears must break 75.55 support before approaching 75.00.

However, the 200-DMA at 74.47 and the January low at 73.72 will test the USD/INR selling.

Re: Daily Market Analysis by Forex92

USD/JPY maintains increases near 115.00 but lacks bullish conviction in the face of the Ukraine crisis.

The USD/JPY pair traded with a slight bullish bias during the first part of the European session, but struggled to break through the key 115.00 level.

The pair saw some purchasing on Monday and recovered some of its significant losses from Friday, when it hit a one-week low due to the strong US dollar bullish run. The intensification of the Russia-Ukraine conflict benefited investors and the dollar's standing as the global reserve currency.

A truce to allow inhabitants to flee the besieged city of Mariupol has failed. Putin also warned that the war in Ukraine would continue. As a result, the USD rose to its highest level since May 2020.

A rise in US Treasury bond yields also helped the greenback, providing a boost to bullish traders and a tailwind for the USD/JPY. The increase lacked conviction, necessitating prudence before preparing for any major upside in the absence of relevant data announcements.

Despite this, the USD/JPY pair appears to have broken its two-day losing trend and remains vulnerable to USD price movements. So the market will be watching the third round of Russia-Ukraine ceasefire talks. On Monday, Russia said it will cease shooting and offer six humanitarian routes for civilians to flee.

Re: Daily Market Analysis by Forex92

Copper to reach $12160 on a break above $10740/10850 - SocGen

$10740/10850 is now the target for copper. Société Générale strategists say a break over this level will lead to gains towards $11700, then $12160.

Supports at $10200 and $9460

“Weekly MACD is positive, indicating rising momentum.”

Supports at $10200 and $9460 are multi-month trend lines.

“Beyond $10740/10850, next targets are at $11700 and projections of $12160.”

Re: Daily Market Analysis by Forex92

Crude Oil Futures: Additional upside may lose traction

Opening open interest for crude oil futures markets fell by roughly 23.1K contracts on Monday, according to CME Group's flash data. Volume increased by approximately 92K contracts after three days of daily pullbacks.

WTI is $127.50

WTI prices have dipped somewhat from recent heights around $127.00 (March 7), but remain solidly supported by the geopolitical situation. Monday's positive price action was accompanied by shrinking open interest, indicating a possible corrective move aided by crude oil's current extreme overbought conditions.

Re: Daily Market Analysis by Forex92

EUR/CHF is battling to maintain parity near a seven-year low, as Eurozone GDP and Ukraine are being eyed.

Sellers attack intraday bottom around 1.0055 as EUR/CHF slides off multi-year low. After hitting a low of 0.9972, the pair recovered.

Eurozone stagflation fears, fueled by the Ukraine-Russie crisis, weigh on EUR/CHF prices.

“The commencement of conflict has sent shockwaves through financial markets across Europe, with the continent's Stoxx 600 index plunging by 8% since the crisis began,” the Financial Times (FT) stated. Investors fearing a spike in oil prices will hit consumers in a region highly reliant on imports and already facing the greatest inflation in decades, removed a record $6.7 billion from European stock funds last week.

Reuters portrays the impasse between Ukraine and Russia over a ceasefire and human corridor. “Ukrainian officials say a Russian airstrike attacked a bread factory in northern Ukraine on Monday, killing at least 13 civilians,” the news reports.

No big updates on the Kyiv-Moscow spat and Russian headlines suggesting the nation was ready to provide safe passage for Ukrainian residents in some cities seemed to have halted the previous day's heavy risk aversion. Optimists are also backed up by reports that the EU and the UK have rejected the US intention to completely prohibit Russian oil shipments.

Even yet, S&P 500 and Euro Stoxx 50 Futures fall approximately 0.5 percent, while US 10-year Treasury yields rise from two-month to 1.8 percent, up five basis points.

Looking ahead, non-seasonally adjusted Q4 Eurozone GDP growth is forecast to be 0.3 percent QoQ and 4.6 percent YoY, which may assist the EUR/CHF fight the bears.

However, market sentiment problems, notably from Ukraine and Russia, remain in control.

Analyses

Unless prices rise over the April 2015 low of 1.0240, EUR/CHF prices will likely fall to the 2015 low of 0.9725.

Re: Daily Market Analysis by Forex92

The AUD/USD currency pair crosses 0.7300 on stronger sentiment, ignoring a local emergency ahead of the RBA's Debelle speech.

Ahead of Wednesday's European session, AUD/USD reflects market caution amid negative domestic triggers. However, the Aussie pair is up 0.15 percent intraday at 0.7280, its first increase in three days.

The withdrawal of Ukraine from NATO and the confirmation of the first humanitarian corridor in Kyiv have shaken the prior risk-off mindset. The release of an American prisoner by Venezuela and subsequent US reduction of sanctions are also favourable for sentiment and the AUD/USD exchange rate.

Concerns over Ukraine's EU membership and Russia's drive to nationalise foreign-owned enterprises that have shut down threaten market sentiment and AUD/USD bulls.

"Prime Minister Scott Morrison has declared a national emergency in reaction to disastrous floods in northern New South Wales," reports ABC News.

In this context, US 10-year Treasury yields fall two basis points to 1.85%, but S&P 500 Futures remain stronger for a day at least.

Notably, strong Chinese inflation data and less dovish RBA Governor Philip Lowe have aided the AUD/USD pair's recent rally.

Nonetheless, purchasers will keep an eye on risk drivers and await RBA Deputy Governor Guy Debelle's remarks, due around 08:00 GMT.

If RBA's Debelle follows Lowe's lead and raises rates this year, the AUD/USD will climb.

Analyses

Despite the recent AUD/USD rally, the 200-DMA level of 0.7317 limits the quote's immediate upside. Pullbacks may target the 100-DMA and 50-DMA, around 0.7230 and 0.7190, respectively.

Re: Daily Market Analysis by Forex92

GBP/USD Dribbles within the weekly range of 1.3100

Bears pause at 1.3120 as the GBP/USD reverses a three-day slump ahead of Wednesday's London open.

The quotation can yet rise above 1.3145, but Momentum remains sluggish.

Even if the cable pair crosses the 1.3145 level, the 100-HMA and previous support from late February will act as resistance around 1.3225 and 1.3270.

The 200-HMA and a downward sloping trend line from February 23 will be the last lines of defence for the GBP/USD bears.

Rather, new drops must overcome the aforementioned rectangle's support line, near 1.3080.

Then a south-run towards 1.3000, then to 1.2850 in November 2020.

Re: Daily Market Analysis by Forex92

USD/CAD Price Analysis: Reversal from two-month-old resistance 1.2800

During Thursday's Asian session, USD/CAD retreated from intraday highs to 1.2810.

The Loonie pair reversed an upward trend line that began in early January. This reversed the quote's highest levels since late December 2021. The Momentum line is weakened by the pullback moves.

However, a breach of the 50-DMA level near 1.2685 will send USD/CAD bears to a five-month support line under 1.2600.

The 200-DMA at 1.2589 will prevent additional losses.

To resurrect the USD/CAD bulls, recovery advances must cross the aforementioned resistance line, close to 1.2900 at press time.

Even yet, a horizontal band of tops marked in August and December of 2021, about 1.2950, will limit further gains.

The USD/CAD is likely to prolong its recent decline, but the bears face challenges.

Re: Daily Market Analysis by Forex92

USD/INR Price News: Inflation and concerns about Ukraine weigh on the Indian rupee, pushing it below 76.50.

As Indian markets start on Thursday, USD/INR renews intraday high around 76.40. The rupee (INR) so ends a two-day rally and falls from a one-week high.

Concerns about increased inflation and a four-month hiatus in daily fixing of gas prices triggered the recent USD/INR rally. “State-run fuel retailers may resume daily price adjustments of petrol and diesel soon, executives of oil marketing businesses said,” Reuters reported citing Mint.com.

Reuters' latest survey suggests Indian retail inflation fell slightly in February due to decreased food prices, but economists warn that rising oil prices will cause inflation to skyrocket in the months ahead.

“Indian economy is once again building up momentum after once-in-a-century pandemic and this is reflection of our economic decisions and strong foundation of economy,” stated EUCLID Procurement, citing Reuters.

The market remained cautious ahead of the crucial Ukraine-Russia peace negotiations in Turkey, as well as the US Consumer Price Index (CPI) for February, which is expected to rise to 7.9% from 7.5 percent.

Lower oil prices and optimism on a favourable outcome due to Ukraine's recent retreats seem to be supporting Asian shares. As a result, the BSE Sensex is up 3.0% intraday by press time, while the S&P 500 Futures are flat.

Due to the nation's reliance on petroleum imports and historic deficit, oil prices would be essential for USD/INR.

Analyses

The USD/INR pair's last bounce off the 10-day EMA targets the December 2021 high of 76.60. The 77.00 level and the recent top around 77.20 will limit any additional gains. The mid-February peak of 75.70 will also operate as a downward filter.

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