Markets retreat again as Ukraine crisis worsens
Friday 4 March 2022
Russian attacks on a nuclear power plant in Ukraine has rightly sent shivers through markets and the recent firmer risk tones/equity market rallies have been reversed, and more in some cases. You don't need me to spell it out. These are extremely worrying times. JPY and CHF demand notable again in FX pairs with the Euro still feeling the brunt of the fall-out but commodity currencies still feeling the love.
Gold remains underpinned but $1950 still providing a decent cap while oil has had a roller coaster ride on the risk uncertainty and amid reports that Iran will soon be adding its supply into the mix. Meanwhile conjecture over Central Bank rate hikes continues particularly now in these increasingly fragile times. Powell delivered more hawkish tones yesterday with particular reference to oil price-led inflation threats. Today sees the latest US NFP data but while we might see some knee-jerk reaction if wide of expectations it's not going to carry much weight at this time.
GBPUSD: Has resumed it's downward trend again after that 1.3400-20 failure and seen a break back down through 1.3350-60 amid the fragile risk tones bringing GBJPY supply albeit tempered by some further EURGBP supply too. EURGBP: Yesterday I warned "Further pressure expected in current scenario." and so it proved but bids/support at 0.8250-65 putting a base on it for the moment albeit with rally sellers still poised.GBPJPY: Finding support at 153.50 this time after the retreat from 155.00 amid softer risk tones justifying my core belief.
EURUSD: The general EUR weakness continues adding pressure on this core pair amid firmer USD tones too and now having a look at 1.1000 where Barrier option interest awaits having broken down through 1.1050. USDJPY: Capped at 115.80 amid the risk-off JPY demand but overall USD dip demand still supporting so pips banked and not being greedy. EURJPY: Holding 127.00 so far in this latest retreat but sellers always poised in these ever fickle times amid the Euro generally remaining fragile. USDCHF: Sellers stilL poised. SNB will be keeping a close eye as always but will judge their time as market forces prevail. EURCHF: 1.0150-60 support now history amid the EUR supply/CHF risk-off demand double whammy and now targetting 1.0100. SNB will be keeping a close watch but can't hold out against combined market forces as I've been warning.
AUDUSD: Finally a break of 0.7320 helped by thew general commodity currency demand but sellers poised long the way still. USDCAD: Supported at 1.2650-60 amid falling oil price, firmer USD and CADJPY supply but rally sellers poised and large options very much in play today.I still think we'll see some two-way business amid all the uncertainty.Caution required though with so many variables.
As we look at trading opportunities it's even more important not to over analyze but trade the price action with discipline and patience. I can help with this in my 1-2-1 sessions and now is the time, more than ever, to get on board with those if you haven't already done so. Contact me to take advantage of currently reduced prices.
Let's continue to be careful out there in all things. Staying safe must be our main priority still. Have a good week-end.
Interbank rates: 08.45 GMT