The US Dollar soared due to the risk aversion sentiment as Russia invaded Ukraine. Moscow took control over Chernobyl while the US intelligence revealed that the main aim of Russia was to depose the Ukrainian president and impose a favorable person.
Until 1991, the Ukrainian territory was a part of the Soviet Union. However, it was dissolved later. Currently, Ukraine is the second-largest country in Europe with extensive farmlands. Besides, this country is a source of precious metals like nickel, copper, iron, neon and other top-tiered commodities. As a result, any uncertainty here directly relates to the Eurozone economy and precious metals market.
The issue arose as soon as Ukrainian president Zelenskyy led the country to join NATO- a red line for President Putin. The Russian president believes that the main aim of the US is to include Ukraine in their party to limit Russian power. However, in the financial market, participants have become silent about the inflation problem where Europe and the US central banks were about raising the interest rate.
The market put little importance on macroeconomic releases in the past few days, where the February Markit Flash PMIS expanded rapidly in place. Consumer confidence in Germany and the EU reported upbeat data by aligning with the current post-covid recovery. On the other hand, the US reported the second estimate of the Q4 GDP, coming with a 7% upward result, while the current investor's focus is to see how ISM PMIs and employment reports.
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Forex Technical Outlook for 28 February 2022 to 04 March 2022
There are several trends changing events that will be published this week where the interest rate decision from RBA and BOC will be in focus. The current expectation of BOC is to raise the overnight rate by 0.25 bp. Although no change is expected from the RBA, the better than expected q/q GDP might work as a bullish factor for the AUD. On Friday, the US non-farm payroll will be released where the current expectation is to see 400k new jobs with an improved unemployment rate.
The price spiked higher in the US Dollar index daily chart but failed to show a strong momentum above the 97.45 resistance level. As a result, bears regained momentum and closed the week with a bearish daily candle below the 96.70 level. In that case, investors should closely monitor how the price trades in the dynamic 20 EMA support, where any bullish rejection might initiate the trend continuation pattern towards the 98.00 area. On the other hand, a break below the static 95.80 swings low might increase the bearish possibility towards the 94.00 area.
EUR/USD bulls failed to hold the price above the 1.1300 key level, pushing bears to regain the momentum towards the 1.1100 level. A bullish correction is highly expected as the recent price showed exhaustion from the 1.1121 support level.
This technical analysis shows how the EURUSD daily chart formed a rectangle pattern followed by divergence with MACD lines. Meanwhile, the dynamic 20 EMA is above the price, and MACD Histogram trended lower.
Based on the current price structure, a bullish correction towards the 1.1494 level is expected, followed by the solid bullish rejection from the 1.1121 level. On the other hand, if the daily candle closes below the 1.1121 level, investors may experience a new swing low below the 1.1100 area.
Similar price action was found in the GBP/USD price, where the price wiped out trading positions at the 1.3300 area and rebounded higher. However, the selling pressure from the symmetrical triangle was extreme where any correction would be a bearish trend continuation opportunity.
This technical analysis shows the MACD Histogram remained strong bearish while the dynamic 20 EMA is above the current market price. However, the strong selling pressure from geopolitical uncertainty opened a gap between the price and dynamic level where a bullish correction towards the 1.3546 level is pending.
In that case, the buying possibility towards the 1.3546 level is intact until the price breaks below the 1.3358 support level with a strong bearish daily close.
AUD/USD bears failed to take the price below 0.7100 key support level and rebounded higher with a bullish trading day. Therefore, the next resistance level is at 0.7315, which is the primary target of the current buying pressure.
The above technical analysis shows how the price was exhausted from the 0.7100 key support level while the MACD Histogram remained steady bullish. Moreover, the price rebounded higher above the dynamic 20 EMA and successfully recovered the war-driven bearish pressure.
In that case, investors should closely monitor how the interest rate and GDP releases for the AUD are coming where the current expectation is neutral for the AUD. in that case, any bearish opportunity from 0.7285 to 0.7315 has a higher possibility of taking the price down towards the 0.7100 area. On the other hand, a bullish daily close above 0.7320 would open a bullish opportunity towards the 0.7500 area.
Despite the war-driven volatility, USD/JPY remained bullish after an attempt to break below the 114.19 swing low. Therefore, as long as bulls hold the price above the dynamic 20 EMA, another upside pressure towards the 116.34 is highly possible.
The above technical analysis shows that the MACD Histogram failed to hold the bearish momentum and moved to the neutral zone while the dynamic 20 EMA is above the current market price.
In this context, the price is likely to grab the liquidity from the 117.50 area, where any bullish opportunity from 115.20 to 115.70 may work well. On the other hand, a daily candle below the dynamic 20 EMA might need a HODLing approach to find another buying opportunity from the 114.00 area.
The Ukraine-Russia war opened a new trading range for XAU/USD where the price tested the 1973.93 level as the multi-year high. Moreover, the broader market trend is still bullish where any buying opportunity from the 1877.70 swing low may attempt again to test the 2000.00 level.
The above technical analysis shows how the MACD Histogram showed a corrective bullish pressure during the excessive war-driven volatility. However, the dynamic 20 EMA is above the price where the current bearish correction approaches the price towards the dynamic level.
In that case, any bullish opportunity from 1880.00 t0 1860.00 has a higher possibility of taking the price up towards the 1970.00 area. On the other hand, a strong bearish daily close below the dynamic 20 EMA might increase the volatility in the price with a possibility of testing the 1829.14 level.
BTC/USDT showed a 23% weekly loss and found a bottom at the $34,337.00 level. The weekly support of $34,762 was the major barrier for investors to another drop in the BTC price.
According to the IntoTheBlock global in and out money model, roughly 4.50 million addresses purchase 2.54 million BTC. The buying level of $41,190 indicated that bulls are still interested in taking the price up towards the $45,000 level. On the other hand, the price crash from 25 February caught many investors where the on-chain volume was above the 200 day moving average line. Another reason for expecting bullish pressure is the recent slump in the leverage ratio of Bitcoin from the all-time high of 0.218 to 0.192. It is a sign that the market has less coiled, and bulls may regain the momentum and take the price up towards the $45,000 level.
The above technical analysis shows how the price formed a bullish long wicked candle from the weekly support. However, the current price is below the dynamic 20 EMA while MACD Histograms are bearish.
In that case, a bullish daily candle above the dynamic 20 EMA would open rooms for testing the 45000.00 level in the coming days. On the other hand, investors should closely monitor how the price trades at the 40,000 level, where a strong bearish rejection might halt the current bullish possibilities.
Overall, the geopolitical uncertainty from the Russia-Ukraine crisis might make technical outlooks obsolete where a robust trade management system is applicable to avoid uncertain situations. Besides, investors may experience additional volatility from BOC rates and US Non-farm payroll releases.