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Market Update- Ukraine and Russian crisis escalates
Foreign currencies opened lower on Monday morning against the Dollar as geopolitical uncertainty causes investors massive selling. Investors turns to bid haven currencies such as USD, CHF and JPY to avoid risks posed by the Ukraine and Russian crisis.
The Dollar Index extended gains early Monday morning reclaiming 96.00 after breaching the 95.75 near-term resistance on Friday. The index has more room for gains to the upside after last week’s positive US inflation data. Traders need to watch out for FOMC member Bullard’s speech scheduled for later New York session for any policy clues.
The Japanese Yen extended gains for the second day on rising market risk. The NZDJPY loses -1.08% on Monday morning, after failing to hold above 76.70 near-term resistance turned support.
The current trend indicates a bearish outlook and bulls could try to defend gains at a near-term support at 75.400, which coincides with 5 months low. A positive Japanese GDP data could strengthen the Yen in the near-term and traders should pay close attention.
The GBPJPY continued to suffer loses earlier today as investors exit carry trades. GBPJPY lost -0.77% in European session before bouncing off at last week’s low at 155.40 and further downside movement is possible towards 153.10, intermediate support, if a peace settlement is not engaged on the current geopolitical tensions.
The US equity markets closed lower on Friday, with Nasdaq 100 losing -3.07% after breaking below near-term support at $14500. A near-term support at $14000 could be an immediate barrier to defend Nasdaq from further loses as rising treasury yields continue to hurt the stock market.
The S&P 500 edged lower after breaking the February low at 4451.49 on Friday. The index lost -1.90% on Friday afternoon and the outlook remains bearish towards 4315.00 area in the near-term.
European Equities slammed lower during European session opening, with DAX (German 40) gaping down -3.23% after closing at 15420.00 on Friday.
The leading German index is trading near a 10-month support at 14842.00 and the (15420-15070) gap could be closed in the near-term if bulls defend this support. President Lagarde will be speaking later in New York session and traders should watch out for volatility.
The FTSE 100 extended loses as bullish trend stalls after hitting a 3 year high at 7700.00. The index edged lower losing -1.13% and a potential to trade lower is validated if a 7500.00 near-term support fails to hold.
On Commodity markets, US oil slid slightly lower early Monday after making a new high at $95.00, last seen 7 years ago. Crude oil is in a correction phase after Friday spike, as investors eye $100/barrel due to supply fears and geopolitical tensions in Ukraine.
Gold broke a 3-months high at $1850.00 on Friday as US inflation soars. On Monday, the yellow metal gains were capped with geopolitical tensions, although possibilities of visiting the 7 months high at $1877.50 are highly probable.
