Articles

EUR/USD Forecast: Bulls side-lined amid persistent risk aversion

EUR/USD Forecast: Bulls side-lined amid persistent risk aversion

207768   February 28, 2022 21:51   FXStreet   Market News  

EUR/USD Current Price: 1.1206

  • Russian attacks on Ukraine continue, denting the market’s mood.
  • ECB President Christine Lagarde is due to speak later in the American session.
  • EUR/USD trades at around 1.1200, with its bearish potential intact.

The EUR/USD pair trades around the 1.1200 level, recovering from an intraday low of 1.1127 but lacking momentum. Safe-haven assets gapped higher at the weekly opening, as the war in Eastern Europe sees no end. Russia keeps attacking Ukrainian cities, and multiple civilian casualties have been reported. Officers from both countries have met at the Ukraine-Belarus border and are currently undergoing peace talks. Nevertheless, the West has imposed multiple and severe financial sanctions on Russia over the weekend. Overall, markets remain in risk-off mode amid fears tensions will continue to escalate.

Market participants have been ignoring macroeconomic data these days, with nothing relevant coming from Europe. The US, on the other hand, has published the January Goods Trade Balance, which posted a deficit of $-107.6 billion and Wholesale Inventories for the same month, up a modest 0.8%. ECB President Christine Lagarde will offer a speech later in the day.  

EUR/USD short-term technical outlook

The EUR/USD pair hovers around Friday’s close, maintaining its bearish stance in the daily chart. The pair keeps developing below all of its moving averages, while technical indicators head firmly lower within negative levels, reflecting sellers’ strength.

The 4-hour chart shows that a bearish 20 SMA provided intraday resistance, as the pair retreated after testing it during London trading hours. The moving average remains far below the longer ones, a sign that bears retain control. Technical indicators recovered from their intraday lows but remain within negative levels. A steeper decline could be expected on a break below 1.1160, the immediate support level.

Support levels: 1.1160 1.1120  1.1075

Resistance levels: 1.1210 1.1260 1.1305

View Live Chart for the EUR/USD

Full Article

GBP/USD: Resistance at 1.3487/1.3500 to cap for a fall back to 1.3173/45 – Credit Suisse
GBP/USD: Resistance at 1.3487/1.3500 to cap for a fall back to 1.3173/45 – Credit Suisse

GBP/USD: Resistance at 1.3487/1.3500 to cap for a fall back to 1.3173/45 – Credit Suisse

207767   February 28, 2022 21:51   FXStreet   Market News  

GBP/USD extended its rebound on Friday. However, strength stays seen as corrective ahead of a retest of medium-term support at 1.3173/35, in the view of analysts at Credit Suisse.

GBP/USD is ideally capped at 1.3487/1.3500

“GBP/USD has been capped well below the 55-day average and mid-February lows as well as its uptrend from December, seen starting at 1.3487 and stretching up to 1.3500 and this rebound is viewed as a temporary bounce prior to the risk turning lower again.”

“Support is seen at 1.3329 initially, below which should see a fall back to 1.3272 and then medium-term support at 1.3173/35 – the 2021 lows, 38.2% retracement of the 2020/2021 uptrend and 200-week average. We continue to look for a good floor here. Should weakness directly extend though, we would see little then in terms of meaningful support until 1.2855/29.”

Full Article

US advanced goods trade balance 107.63B vs 100.4B last month. New record

US advanced goods trade balance 107.63B vs 100.4B last month. New record

207765   February 28, 2022 21:49   Forexlive Latest News   Market News  

USD

  • US advanced good trade balance for January 2020

  • US advance trade balance for January 2022 comes in at 107.63 billion

Most Popular

You might also like

Full Article

AUD/USD flirts with daily high, comfortably above 0.7200 as focus shifts to RBA on Tuesday
AUD/USD flirts with daily high, comfortably above 0.7200 as focus shifts to RBA on Tuesday

AUD/USD flirts with daily high, comfortably above 0.7200 as focus shifts to RBA on Tuesday

207764   February 28, 2022 21:49   FXStreet   Market News  

  • AUD/USD attracted fresh buying near the 0.7160 area and reversed the initial bearish gap opening.
  • Upbeat domestic data, bets for an eventual RBA rate hike in 2020 extended support to the aussie.
  • A recovery in the risk sentiment undermined the safe-haven USD and contributed to the move up.

The AUD/USD pair built on its steady intraday move up and climbed to a fresh daily high, around the 0.7220-0.7225 region heading into the North American session.

Following a bearish gap opening on Monday, the AUD/USD pair attracted some dip-buying in the vicinity of mid-0.7100s and was supported by a combination of factors. The early uptick followed the upbeat release of the Australian Retail Sales data, which reaffirmed market bets for an eventual interest rate hike by the Reserve Bank of Australia in 2022. Apart from this, a recovery in the equity markets prompted some intraday selling around the safe-haven US dollar and further benefitted the perceived riskier aussie.

The initial reaction to the weekend developments surrounding the Ukraine crisis seemed short-lived, which was evident from an intraday bounce across the global equity markets. It is worth recalling that 
Western nations ramped up efforts to punish Russia for its invasion of Ukraine and imposed tough new sanctions, including cutting some of its banks off the SWIFT financial network. Moreover, Russian President Vladimir Putin upped the ante on Sunday and put the country’s strategic nuclear forces on high alert.

The market nervousness, however, eased after the Russian negotiator said that they are interested to reach an agreement with Ukraine as soon as possible. Adding to this, reports indicated that the Ukraine-Russia dialogue has already started in Belarus and Russian media is coining this as ‘peace talks’, raising expectations for some de-escalation of tensions. This, in turn, helped the risk sentiment to stabilize a bit and provided modest lift to the AUD/USD pair amid some repositioning trade ahead of the RBA on Tuesday.

That said, any optimistic move in the markets is likely to remain capped as the focus remains glued to fresh developments surrounding the Russia-Ukraine saga. Hence, it will be prudent to wait for some follow-through buying, possibly beyond the 100-day SMA hurdle, before positioning for any further gains amid absent relevant market moving economic releases.

Technical levels to watch

Full Article

Canada: Q4 Current Account falls to C$ -0.8B versus C$ 4.8B expected
Canada: Q4 Current Account falls to C$ -0.8B versus C$ 4.8B expected

Canada: Q4 Current Account falls to C$ -0.8B versus C$ 4.8B expected

207763   February 28, 2022 21:49   FXStreet   Market News  

Canada’s Current Account was a C$ 0.8B deficit in Q4 2021, according to data released by Statistics Canada on Monday. That was well below the expected surplus of C$ 4.8B and marked a drop from Q3’s C$ 0.8B surplus. 

Market Reaction

The latest weaker than expected Canada trade figures do not seem to have impacted the loonie, with USD/CAD at present largely unmoved in the 1.2740s area. The BoC will be the main event of note this week for the loonie though the overarching direction of FX market sentiment will remain predominantly influenced by geopolitics. 

Full Article

OPEC+ set to deliver 400k bpd increase, as planned – report

OPEC+ set to deliver 400k bpd increase, as planned – report

207761   February 28, 2022 21:45   Forexlive Latest News   Market News  

oil daily

There’s been little real push for more oil from OPEC+. The UAE has refrained from criticizing Russia’s invasion so they’re certainly not isolated from OPEC.

OPEC argues that there’s geopolitical premium in oil and that barrels aren’t missing.

Of course, they certainly don’t mind the windfall in revenues from oil near $100 and I don’t think they want to spoil their own party.

Today, WTI crude oil rose as high as $99.10 but its slipped back to $95.37.

Full Article

Canadian January producer price index +3.0% m/m vs +0.7% prior
Canadian January producer price index +3.0% m/m vs +0.7% prior

Canadian January producer price index +3.0% m/m vs +0.7% prior

207760   February 28, 2022 21:40   Forexlive Latest News   Market News  

Full Article

EUR/USD consolidates at 1.1200, euro the major G10 underperformer as markets assess Russia sanctions fallout
EUR/USD consolidates at 1.1200, euro the major G10 underperformer as markets assess Russia sanctions fallout

EUR/USD consolidates at 1.1200, euro the major G10 underperformer as markets assess Russia sanctions fallout

207759   February 28, 2022 21:40   FXStreet   Market News  

  • EUR/USD has rebounded from lows just above 1.1100 towards the 1.1200 level but continues to trade with substantial on-the-day losses.
  • The euro is the major G10 underperformer as markets assess the consequences of the latest EU/Western sanctions against Russia.

After coming within a whisker of printing fresh annual lows near the 1.1100 level at the re-open of Monday Asia Pacific trade as markets digest the weekend’s geopolitical developments, EUR/USD has been erratic but staged a reasonable comeback. Having been as much as 1.3% lower on the day when trading at lows in the 1.1110s, the pair now trades down closer to 0.7% on the day at the 1.1200 level. Uncertainty regarding the economic impact of the latest round of EU/Western sanctions against Russia, which include the blocking of some Russian banks from SWIFT and the freezing of a large portion of the CBR reserves will likely knee-cap short-term rallies.

An emergent consensus view of the past few sessions since Russia’s invasion of Ukraine has been that ECB tightening, previously thought to begin as soon as Q4 this year, will now be substantially delayed. The Eurozone economy now faces potentially significant disruption to its energy supply, with higher associated energy costs set to further eat into living standards, as well as a generalised hit to economic confidence with a war on its doorstep. This likely explains why the euro is the major underperforming G10 currency on Monday.

US data this week in the form of the January jobs report January ISM surveys, as well as Fed, speak with Chair Jerome Powell delivering his semi-annual testimony before Congress is likely to remind markets that the Fed remains on the tightening path. That, coupled with a continued safe-haven-related USD bid as the Ukraine war rumbles on and euro underperformance on economic uncertainty is likely to keep EUR/USD gains capped. One risk event to watch on Monday is talks between a Ukrainian and Russian delegation on the Ukraine/Belarus border. If talks were to deliver a ceasefire (not expected), that could see safe-haven demand unwound and the euro rebound back towards 1.1300.

Full Article

Canada IPPI for January 3.0% versus 0.9% estimate
Canada IPPI for January 3.0% versus 0.9% estimate

Canada IPPI for January 3.0% versus 0.9% estimate

207758   February 28, 2022 21:36   Forexlive Latest News   Market News  

  • Industrial product price index (IPPI) 3.0% vs 0.9% estimate
  • IPPI YoY 16.9% vs 16.1% last month
  • Raw material price index (RMPI) MoM 6.5% vs 4.9% estimate
  • RMPI YoY 30.5% vs 29.0% last month

For the full report CLICK HERE

Full Article

GBP/USD retakes 1.3400 mark, fills the bearish gap amid modest USD pullback
GBP/USD retakes 1.3400 mark, fills the bearish gap amid modest USD pullback

GBP/USD retakes 1.3400 mark, fills the bearish gap amid modest USD pullback

207757   February 28, 2022 21:36   FXStreet   Market News  

  • GBP/USD recovered around 100 pips from the daily low and has now filled the weekly bearish gap.
  • Signs of stability in the equity markets undermined the safe-haven USD and extended some support.
  • The upside remains capped amid fears about an escalation in tensions between Russia and the West.

The GBP/USD pair climbed to a fresh daily high during the mid-European session and is now looking to build on the momentum beyond the 1.3400 round-figure mark.

The pair rallied around 100 pips from the vicinity of the 1.3300 mark on Monday and has now filled the weekly bearish gap amid the emergence of some intraday US dollar selling. The nervousness over the worsening situation in Ukraine eased after the Russian negotiator said that they are interested to reach an agreement with Ukraine as soon as possible. This, in turn, led to a goodish recovery in the equity markets, which dented demand for the safe-haven greenback and was seen as a key factor behind the GBP/USD pair’s strong intraday bounce.

According to the latest reports, the Ukraine-Russia dialogue has already started in Belarus and Russian media is coining this as ‘peace talks’, raising expectations for some de-escalation of tensions. Apart from this, a steep decline in the US Treasury bond yields, along with diminishing odds for a 50 bps Fed rate hike move in March, further undermined the greenback. The recent geopolitical developments now seem to have convinced investors that the Fed would not adopt a more aggressive policy stance to combat stubbornly high inflation.

It, however, remains to be seen if the GBP/USD pair is able to build on the move or meets with a fresh supply at higher levels amid the risk of a further escalation in tensions between Russia and the West.  It is worth recalling that Western nations ramped up efforts to punish Russia for its invasion of Ukraine and imposed tough new sanctions, including cutting some of its banks off the SWIFT financial network. Moreover, Russian President Vladimir Putin upped the ante on Sunday and put the country’s strategic nuclear forces on high alert.

This makes it prudent to wait for some follow-through buying before positioning for any meaningful upside. In the absence of any major market-moving economic releases, the market focus will remain clues to fresh headlines surrounding the Ukraine crisis. This will continue to play a key role in influencing the broader market risk sentiment and the USD price dynamics, which, in turn, should provide some impetus to the GBP/USD pair.

Technical levels to watch

Full Article

Chile Unemployment rate above forecasts (7.2%) in January: Actual (7.3%)
Chile Unemployment rate above forecasts (7.2%) in January: Actual (7.3%)

Chile Unemployment rate above forecasts (7.2%) in January: Actual (7.3%)

207756   February 28, 2022 21:35   FXStreet   Market News  

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.




Feed news

Full Article

US advance goods trade balance -107.63B vs -100.4B expected

US advance goods trade balance -107.63B vs -100.4B expected

207753   February 28, 2022 21:35   Forexlive Latest News   Market News  

USD

  • US trade balance data

Adam Button

Monday, 28/02/2022 | 13:32 GMT-0

28/02/2022 | 13:32 GMT-0

US trade deficit
  • Prior was -100.9

This is a fresh record.

Most Popular

You might also like

Full Article