Market Focus

Volatility continued to grip the global markets as the markets reassessed the headline news related to the war in Ukraine. The Dow Jones Industrial Average declined 0.56%, and the Nasdaq Composite dropped 0.28%. The S&P 500 finished 0.72% lower, dropping further in a technical correction. Notably, the S&P 500 lurched lower in the last hour of the trading session as the benchmark gained almost 2% before plunging as much as 1%. US equities seemed to be a volatile mix of movements linked to the war, where small movements quickly became big ones as market makers rush to rebalance large options positions.

The European Union announced on Tuesday it will reduce its import of Russian gas by two-thirds before the end of the year. The EU imported more than 45% of its total natural gas from Russia in 2021. The EU’s new plan, REPowerEU, will focus on ramping up renewable and high-efficiency energy sources. At the same time, the EU will be trying to decrease its dependence on Russian exports.

The price of nickel surged more than double, over $100,000 per ton, on Tuesday as investors assessed the reality that Russia, a major supplier of the metal, is now facing extensive sanctions from major countries. Because of the unprecedented price movement of nickel, the LME decided to suspend nickel trading on Tuesday morning. The surge in nickel’s price might potentially threaten EV automakers as nickel is a critical ingredient in lithium-ion batteries.

Main Pairs Movement

Gold surged to $2,050 per ounce, up 2% on Tuesday, as risk sentiment ebbed and flowed surrounding the topic of Ukraine’s war. Regardless of the upcoming interest rate hikes schedule, gold seemed to continue finding dip-buying demand as the war in Ukraine is far from over.

AUDUSD witnessed some pullback toward 0.7245 after a stalwart rally in March. At the same time, RBA governor Philip Lowe mentioned that it was plausible that the interest rate increases later this week, although the RBA would need to take its time to assess incoming data before making the decision.

EURUSD bulls moved in to stop the fifth consecutive day of losses as risk sentiment rallies. EURUSD traded at 1.08955 at closing, up 0.39% on Tuesday. The rallies came in when the market latched onto hopes of a breakthrough in the dialogue between Russia and Ukraine as well as an interview between Ukraine’s president and ABC news.

Technical Analysis

GBPUSD (4-Hour Chart)

Cable traded slightly lower as market participants continue to monitor the evolving crisis in Eastern Europe. Britain announced at 16:00 GMT that it would ban Russian oil imports in phases. With soaring energy prices, this move could put further price pressure on British citizens and perhaps provoke the ECB to hike rates further to control inflation. As of writing, the US has also announced plans to ban Russia’s oil imports.

On the technical side, Cable has defended the support level at 1.3096; however, on the four-hour chart, Cable seems to be trending further down and the support level seems relatively weak. RSI for Cable is currently sitting at 26.4, dipping into under bought territory. GBPUSD is currently trading below its 50, 100, and 200-day SMAs.

Resistance: 1.3185

Support: 1.2998, 1.2876

 

EURUSD (4-Hour Chart)

The European Union announced its Q4 GDP, which was in line with analyst estimates of 0.3%, quarter over quarter; furthermore, employment change was also in line with predictions. The shared currency traded slightly higher against the Dollar, but EURUSD is still unable to break through the resistance at 1.0946. The E.U., which is heavily dependent on energy imports from Russia, is still divided on how it would proceed with oil sanction and the potential spillover effects it would have on the overall EU economy.

On the technical side, the support level at 1.0839 holds firm for EURUSD. The 1.0946 resistance level still stands unchallenged. RSI for the pair sits at 38.87, as of writing. EURUSD is currently trading below its 50, 100, and 200-day SMAs.

Resistance: 1.0946, 1.1127

Support: 1.0839, 1.0766

 

XAUUSD (4-Hour Chart)

Gold pierced higher as tensions continue to escalate between Ukraine and Russia; furthermore, with global sanctions ramping up, market participants have fled to Gold for safety. Gold briefly touched $2069 during the opening hours of the U.S. market. The Dollar and Gold both spiked as Western nations begin sanctions on Russian oil.

On the technical side, XAUUSD has reached a region of no resistance. The historical high of XAUUSD stands at $2070.435, which is in arms reach from recent prices. RSI for XAUUSD is currently at 77.13. XAUUSD is trading well above its 50, 100, and 200-day SMAs.

Resistance: 2070

Support: 2000, 1982