Ukraine/Russia Political Crisis Dominates The News Feed

Investors sustain a largely mixed reaction between a not-so-aggressive rate hike for March and heightened border tensions between Ukraine and Russia, early Thursday morning.

The Dollar index spiked up from 95.70 early morning as reports indicated a possible Russian attack on a Ukrainian village causing investors to quickly bid safe haven currencies.

However, going into the European session, the Dollar shaded off its daily gains after attempting to break above 96.00 near-term resistance. The index shows general weakness as investors’ bullish sentiment got dampened by FOMC meeting minutes that did not clarify the position of the Fed on the interest rate cycle for 2022 conflicting with prior sentiments of an aggressive rate hike to curb soaring inflation in the US.

The EURUSD is still under selling pressure as geopolitical tensions between Russia and Ukraine worsened early morning on Thursday, sending investors in a risk averse mode across foreign currencies. The currency edged lower towards 1.1323 temporary support, only to regain bullish momentum during European session opening.

Upside gains remain capped with 1.1385 near-term resistance as investors remain in a cautionary state amid risk lingering on the market. ECB member Lane will be speaking later in the day and could drop clues on ECB interest rate cycle for 2022, while US will release Philly Fed Manufacturing Index data and unemployment claims for January.

AUDUSD reclaims 0.7200 as investors price in positive employment change release early Thursday morning. During European session, AUDUSD bulls managed to sustain a bullish outlook by defending 0.7150 near-term support and a weak USD outlook.

GBPUSD soared ahead of Retail Sales for January due for release, Friday morning. Cable broke above a critical barrier at 1.3600 post Wednesday positive CPI data as bulls attempt to move outside a 2 weeks consolidation.

USDJPY suffers selling pressure as Japanese yen remains attractive against a softer US dollar. The USDJPY lost 0.48% as bears target a critical near-term support at 115.00 and a break below that support could cause further downside movement.

European stocks edged lower as gains remain capped with heightened tension between Russia and Ukraine, with FTSE sliding lower losing -0.63% as bulls failed to break above 7600.

The index could slide lower towards 7500 in the near-term. CAC40 bulls reclaimed morning loses after finding near-term support at 6900. The index is trading above opening price as bulls attempt to break above 7000 near-term resistance.

Gold continues to surge post FOMC January meeting minutes release after investors fail to get clarify on the interest rate cycle for this year, amid increasing inflationary pressure. The Yellow metal broke above 1880 as investors target 1916.70 high last reached in June 2021.

US OIL prices edged higher as bulls price in supply fears amid rising demand indicated by US crude oil inventories and EIA report. WTI finds a near-term support above $90 per barrel with analysts suggesting a possibility of prices reaching $100 per barrel soon.