Daily market analysis

March 1, 2022

Major indices declined on Monday following the weekend’s nuclear deterrent comment from Putin. However, equities market began splitting as the negotiation between Russia and Ukraine commenced. The Dow Jones Industrial Average declined 0.49% while the Nasdaq Composite closed higher at 0.41%; the S&P 500 closed slightly below the previous trading session, dropping 0.24% on Monday.

Currency markets were also a major area of volatility on Monday. In response to a currency move that the Ruble tumbled almost 22% against the US dollar and major sanction from several countries, the Central Bank of Russia decided to hike more than double of its interest rate, from 9.5% to 20%. 

Along with the US joined allies in Canada and Europe in moving to remove Russian banks from SWIFT, Switzerland addressed that it will freeze Russian assets, setting aside a tradition of neutrality. Data from Swiss national bank has shown that there are more than 11 billion worth of assets in 2020.

Main Pairs Movement:

GBPUSD seesaws around 1.3410 heading into the Asian session on Tuesday. The British Pound bounced back on Monday as markets saw the development of Russia and Ukraine, resulting in a downside move in the safe- heaven currency, the US dollar.

Gold was once boosted more than $30 on Monday, but it cooldown back to $1,906 in the US session as the market mod has improved following the negotiation of Russia and Ukraine. The first round of the negotiation looks peaceful, which pares the safe- heaven demand.

West Texas Intermediate surged 7% towards $100 mark on Putin’s nuclear threats and Russia- SWIFT ban. WTI price jumps as Russia is going to face disruptions and obstacles to its oil export without SWIFT system. In the meantime, OPEC+ has revised down the market surplus estimate for 2022.

Technical Analysis:

GBPUSD (4-Hour Chart)

Cable ended the day trading 0.4% higher than the previous day’s close. Market participants continue to favor the greenback as tensions between Ukraine and Russia are yet to resolve. Today’s Sterling gain is mostly attributed to decreasing U.S. treasury yields—the 10 year treasury yield is currently at 1.86%. With geopolitical conflicts yet to be resolved, the pound could continue to be dominated by the greenback.

On the technical side, Cable has found firm support around the 1.3311 price region. Near term resistance level at 1.3435 has been challenged but the pair is unable to break through that level yet. RSI for the pair sits at 47.1758. As of writing, Cable is trading below its 50, 100, and 200 day SMA.

Resistance:  1.3435, 1.3522

Support: 1.3311

EURUSD (4-Hour Chart)

The Euro-Dollar pair saw a sharp drop at market open, but the pair was able to regain some ground as market sentiment for the Euro improved. News of peace talks between Ukraine and Russia buoyed the Euro, however the Dollar remains dominant as the safe haven asset. Lowering U.S. treasury yields also benefited the Euro.

On the technical side, the Euro-Dollar pair is facing a key resistance at around the 1.12251 price region, but the pair would see another key resistance level around 1.12793. RSI for the pair sits at 46.67, as of writing. EURUSD is currently trading below its 50, 100, and 200 day SMA.

Resistance: 1.1224, 1.12793

Support: 1.11629

XAUUSD (4-Hour Chart)

Gold prices continue to be highly correlated to the events between Ukraine and Russia. Peace talks held today did not yield solid resolution to the conflict, unfortunately; furthermore, Russian president Putin’s unpredictable moves have sent gold prices higher. XAUUSD ended the day 1.07% higher than previous day’s close.

On the technical side, the resistance at 1909.16 is still firm, but gold prices can easily break through this level as market participants continue to use gold as a hedge for risk. RSI for XAUUSD 66.5, indicating some overbuying. Gold is currently trading above its 50, 100, and 200 day SMA.

Resistance: 1909.16, 1953.407

Support: 1900, 1889

Economic Data:

CurrencyDataTime (GMT + 8)Forecast
CNYManufacturing PMI (Feb)09:3049.9
AUDRBA Interest Rate Decision11:300.1%
AUDRBA Rate Statement11:30
EURGerman Manufacturing PMI (Feb)16:5558.5
GBPManufacturing PMI (Feb)17:3057.3
EURECB President Lagarde Speaks21:00
CADGBP (Dec)21:300.1%
USDISM Manufacturing PMI23:0058