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Midday Update
The markets continue to experience parabolic swings amid the war cloud on Tuesday morning. Commodity prices continued to drop as Chinese lockdowns indicate slowing demand on energy markets and industrial output amid ravaging COVID 19 cases.
Oil slumped below $100 as sellers gather momentum in the near term. US WTI breached the $100 near-term support, losing -7% on Tuesday after China announced lockdown earlier on Monday. The next key level for support is the 50-day moving average at 92.50 and a break below that level may see oil trading below $90, coinciding with pre-Ukraine/Russian war prices.
Brent Crude oil was down -5.12% for the 3rd day after hitting $130/ barrel. Early Tuesday, Brent spiked down to $103.49/Barrel and a potential to retest $100 is highly probable in the near term.
Gold is down -1.18% eyeing $1917 as the commodity experienced a sharp whipsaw after hitting $2070 last week. The yellow metal may push further downside as the Fed interest rate hike scheduled on Wednesday may turn investors to look into the bond market. A possible push towards $1875 is highly probable in the near term as money shifts into interest-generating assets.
Nickel will resume trading on the London Metal Exchange on Wednesday after suspension by the board due to wild swings caused by the short squeeze on the commodity market.
The US 10-year treasury yields extended gains early Tuesday morning, reaching 2.169% a level which was last witnessed in July 2019. The markets are already pricing an aggressive policy cycle by the Fed as seen by yields breach of 2.000% near-term resistance on Monday. Investors are pricing in a 25 bps on Wednesday policy meeting and markets will experience wild volatility in the near term.
USDCHF extended gains towards 0.9400 high which was last seen on 6 April 2021. The pair gained upside momentum after breaching a 0.9358 near-term resistance and a possibility of reaching out for a 0.9471 high.
USDCAD gave in earlier gains during the European session after hitting a 1.2871 high as bulls shy away from a near-term resistance at 1.2900. A break above this near-term resistance may give room for further upside towards 1.2965.
EURJPY shaded off some of its Tuesday gains after bulls lost steam at 130.00 psychological resistance. The pair is currently sitting above 129.50 near-term resistance turned support after pushing higher for 3 days straight.
European Equities markets experienced a selloff early Tuesday morning as European countries extended sanctions on Russia. The CAC40 was down -1.73% after failing to challenge the 6400 near-term resistance. FTSE plunged -1% and bounced off 7071.00 after trading into the 7140-7121 price action gap. DAX remains underpinned below a 50-day moving average as bulls fail to hold above 14000 near-term resistance. The index is currently down -1.35% and the price may seek to fill up a price action gap between 13820.00 and 13920.
US Equities markets closed lower on Monday as markets begin to price in a more hawkish tone from the Fed as policy meeting which begins today. The Nasdaq was down -1.92% and is currently sitting on 13046.65, while the S&P 500 was down -0.74%.
