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Market Sells-Off On Escalating Russia-Ukraine Tensions

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Risk aversion – Market sells-off.

Latest update: Russian President Vladimir Putin said he’s ordered a “special military operation” to protect the people of the Donbas separatist region, but said Russia will “aim for demilitarization and denazification of Ukraine.” Putin said Russia must “defend itself from those who took Ukraine hostage” — the U.S. and its allies who had crossed Russia’s “red line” with expansion of the NATO alliance (Source: Bloomberg).

Investors fled again into safe havens on escalating Russia-Ukraine tensions. The U.S. widened sanctions against Russia and the EU applied penalties to 23 high-level Russians. The West’s sanctions came after Vladmir Putin signed a decree officially recognizing two self-proclaimed separatist republics in eastern Ukraine. Separatist leaders in eastern Ukraine appealed to Putin for help fighting Ukrainian forces, adding into concerns that military conflicts in the region may escalate further.

The U.S. dollar benefited from its safe haven status, sending both pairs EUR/USD and GBP/USD lower. The DAX sold off, approaching the 14000-barrier this morning. Next bearish target is 13600.

EUR/USD: Below 1.1220, watch out for lower prices at around 1.11. A short-term resistance is seen at 1.1330.

GBP/USD: Below 1.3480, watch out for lower prices at around 1.34. A short-term resistance is seen at 1.36.

 

Disclaimer: All trading ideas and expressions of opinion made in the articles are the personal opinion and assumption of MaiMarFX traders. They are not meant to be a solicitation or recommendation to buy or sell a specific financial instrument.

We wish you good trades!

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Uncertainty Is a Plague For Financial Markets

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Welcome to a new trading week. The market nervously awaits the next headline in the Ukraine standoff amid ongoing uncertainty which is a plague for financial markets. The U.S. continues to believe that Russia is positioned to attack Ukraine but Russian President Vladimir Putin said that his country ‘does not want war’ in Europe. Putin accused the U.S. of failing to provide him with security assurances he needs to back down.

A meeting between the U.S. and Russia will be taking place this week and the euro and U.S. dollar could be vulnerable to elevated volatility.

Details of the meeting between Biden and Putin would be prepared during a meeting by U.S. Secretary of State Antony Blinken and Russian Foreign Minister Sergei Lavrov on Thursday, according to a French statement.

The anti-risk dollar struggled to gain ground. The euro slightly accelerated but the technical picture is far from clear. Thus, our forecast for the EUR/USD is neutral, provided that the pair remains trading between 1.1450 and 1.12.

A renewed break above 1.1470 could ignite fresh bullish momentum towards 1.1520 and 1.16. Bears, on the other side, will wait for renewed breaks below 1.1270 and 1.1170.

GBP/USD: The pair faces the resistance at 1.3650-60. A break above 1.3670 could push the pair towards 1.3750. Bears will wait for a break below 1.3540 in order to sell sterling towards 1.3450.

DAX – Chances for a bearish breakout increase

The index dipped again below the crucial 15000-mark and traders now eye the 14800-support. If 14800 breaks significantly, we could see a slide toward 14400 and possibly even 14000. Above 15550 the bias changes in favor of the bulls.

Disclaimer: All trading ideas and expressions of opinion made in the articles are the personal opinion and assumption of MaiMarFX traders. They are not meant to be a solicitation or recommendation to buy or sell a specific financial instrument.

We wish you good trades!

Any and all liability of the author is excluded.

Copyright © All Rights Reserved 2022 MaiMarFX.

www.maimar.co

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Will The Fed Shock The Market With An Inter-Meeting Rate Hike?

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The U.S. dollar benefited from safe-haven flows amid risk-off sentiment. Cash flows into the dollar do not only stem from escalating geopolitical tensions at the border of Russia and Ukraine but also from rate hike speculation. Traders are increasingly convinced about the possibility of a Federal Reserve 50-bps rate hike next month. There was speculation about a rare inter-meeting Fed move before the Fed’s March 15-16 meeting but this move is very unlikely. With only the January data at hand showing broadening price pressures and amid lingering geopolitical unrest the Fed will favor to wait and taking in further data before making such aggressive move.

St. Louis Fed President James Bullard, who favors three hikes by July, said the Fed isn’t “in that mode” of emergency rate hikes, noting that there is little need to surprise markets now given the tightening they are pricing in already.

Nevertheless, traders should be aware of a potential escalation around the Ukraine border that can sent the markets into a tailspin.

EUR/USD – Poised for a slide towards 1.1250?

After the resistance around 1.1490 proved its hold, the euro seems to be primed for a move south toward the support area between 1.1270 and 1.12. We will maintain a neutral stance as along as the euro remains between 1.1450 and 1.12 but in case of a renewed break below 1.1180, our next target will be at 1.11.

GBP/USD: The cable was recently captured between 1.3650 and 1.35. Bulls will now wait for a break above 1.3670 while bears will wait for a slide below 1.3490 in order to sell sterling toward 1.34.

 

Disclaimer: All trading ideas and expressions of opinion made in the articles are the personal opinion and assumption of MaiMarFX traders. They are not meant to be a solicitation or recommendation to buy or sell a specific financial instrument.

We wish you good trades!

Any and all liability of the author is excluded.

Copyright © All Rights Reserved 2022 MaiMarFX.

www.maimar.co

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