The war on Ukraine rages on and monopolizes trader’s interest

The USD gained somewhat on Friday and during today’s Asian session against its counterparts after a strong US Employment report for February yet according to analysts some of the support may have resulted also from safe haven inflows, given that the war in Ukraine rages on. It should be noted that for February the Non-Farm Payroll’s figure exceeded market’s expectations by rising to an extraordinary 678k, while the unemployment rate dropped t o3.8% and the average earnings growth rate slowed down. Overall the Employment report is strong and provides the Fed with a green light for an intense rate hike path, while market’s attention turns towards the release of the US CPI rates for February on Thursday. It should be noted that US stockmarkets were in the reds while Gold’s price was also on the rise another indication of safe haven flows dominating the markets at the current moment.

On the other hand the war in Ukraine weighs considerably on the common currency as the outlook for the recovery of the area’s economy remains hazy, while the EU will have to face a humanitarian crisis as well. EUR traders are expected to keep a close eye over the interest rate decision of the ECB also on Thursday and the bank is expected to keep a dovish tone given the uncertainty present that could weigh on the EUR further. On the other hand, oil prices jumped higher with WTI prices briefly touching the $125 per barrel during today’s Asian session, as the prospect of a tighter supply tends to lead the commodity’s traders. Please note that the US is considering banning any imports of oil products from Russia which is indicative of the current situation. On the other hand AUD seems to have found considerable support as a number of products it exports have now increased prices.

AUD/USD remains in an upward motion and during today’s Asian session tested the 0.7430 (R1) resistance line. We tend to maintain a bullish outlook for the pair as long as it remains above the upward trendline incepted since the 28^th of February. Please note though that the RSI indicator below our 4-hour chart has surpassed the reading of 70 which on the one hand confirms the bull’s dominance, yet on the other hand, may imply that the pair is overbought and may correct lower. Should the bulls actually continue to dominate the pair’s direction, we may see AUD/USD breaking the 0.7430 (R1) resistance line and aim for the 0.7480 (R2) level. Should the bears take over, we may see the pair breaking the prementioned upward trendline, the 0.7375 (S1) support line and aim for the 0.7315 (S2) support level.

EUR/USD intensified its drop testing the 1.0820 (S2) support line before correcting higher. We tend to maintain a bearish outlook for the pair as long ait remains below the downward trendline guiding it yet please note that the RSI indicator below our 4-hour chart has dropped below the reading of 30 which confirms the bear’s dominance yet may also imply that the pair is oversold and a correction higher is possible. Should the selling interest be maintained we may see the pair breaking the 1.0870 (S1) support line, 1.0820 (S2) level and aim for the 1.0765 (S3 )support hurdle. Should buyers be in charge of the pair’s direction we may see it breaking the 1.0935 (R1) resistance line and aim for the 1.1000 (R2) level.

Other highlights for today

Today in the European session we get UK’s Halifax House prices growth rate for February, Germany’s industrial orders for January and Eurozone’s Sentix index for March. During Tuesday’s Asian session, we get Japan’s Current Account balance for January and Australia’s NAB Business confidence and conditions indicator for February, while RBA’s Bullock is scheduled to speak. 

As for the rest of the week

On Tuesday during the European session, we get Germany’s industrial output growth rate for January, Eurozone’s revised GDP rate for Q4 and Canada’s trade data for January. On Wednesday, we get during the Asian session, we get Japan’s revised GDP rate on annual basis for Q4 and China’s inflation metrics for February. On Thursday we get from Japan the corporate goods prices, Norway’s consumer price index, the Czech Republic’s CPI rate as well as the US CPI rates all being for February, while from the US we also get the weekly initial jobless claims figure and on the monetary front we highlight the release of ECB’s interest rate decision, followed by a press conference. Finally on Friday we highlight the release of the UK GDP rates and manufacturing output growth rates for January, as well as Canada’s employment data for February, while from the US we get the preliminary University of Michigan Consumer Sentiment for March.

EUR/USD H4 Chart 

Support: 1.0870 (S1), 1.0820 (S2), 1.0765 (S3)

Resistance: 1.0835 (R1), 1.1000 (R2), 1.1055 (R3)

AUD/USD H4  Chart 

Support: 0.7375 (S1), 0.7315 (S2), 0.7275 (S3)

Resistance: 0.7430 (R1), 0.7480 (R2), 0.7550 (R3)

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