Ukraine Dominates Headlines, Markets Follow Suit

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Forex Market News

CRIMEA has dominated headlines and every website over the weekend and the markets took notice with stocks down heavily and commodities rocketing higher on safe haven flows. The Yen and Swiss and to a certain extent Aussie and US currencies also so intakes. Putin claims he is protecting the Russian population in Crimea (59% of total Crimean population) against what he says was an extremist coup and that international law was breached. He is also looking to protect assets there in naval bases along with the Druzhba pipeline that crosses the Ukraine, supplying Russian oil and gas to the Eurozone. This is no flash in the pan and will prove painful to Europe and Russia if it continues.

 

Today we have the RBA meeting with the expectation of no change whilst figures out yesterday showed most regions manufacturing PMU as steady in growth. Later in the week there is the BOE and ECB monetary policy statements but it will be the above tensions that will dominate the markets and the flow of funds.

DATA HIGHLIGHTS TODAY – AU Building approvals & RBA Rate statement. UK Construction PMI.

AUDUSD – Held above support as some safe haven flows saw the Aussie produce a LHLL. Momentum is on the lower side with little room for lower targets to be met. See this as continued sideways action.
Resistance: 9085/9167/9300
Support: 8900/8654/8550/8300

EURUSD – It did run well on Friday, too well, and now the tensions in Crimea has it producing an inside bearish bar. Expect further selling on this.
Resistance: 13733/13830/14065
Support: 13488/13420/13266

GBPUSD – Still fundamentally bullish the pound, but it will struggle to rally higher in the short term, 1.65 is most likely target.
Resistance: 16785/1.69/1.70
Support: 16300/15950/15830

NZDUSD – Tested the top end of the range on Friday and now a LHLL. Momentum did not get to overbought and there is no initial divergence on the current move, however there is from the previous high of Jan 14th. This is a weak signal for shorting but one nonetheless.
Resistance: 8400/8475/8535
Support: 8090/7925/7714

USDCAD – The Loonie is surprisingly weak with the strong oil moves. A little hard to discern its next move but if oil and Crimean tensions continue to rise then this should fall towards 1.09 ad perhaps even 1.07.
Resistance: 11170/11233
Support: 10859/10715

USDJPY – Similar to the Aussie the Yen strengthened on safe haven flows, also like the Aussie, the momentum is towards exhaustion of oversold area. With support 80 pips below here is will be interesting to watch this play out, will the BOJ or Crimea win.
Resistance: 105.57/108.35/110.50
Support: 100.62/100/99.80

GOLD – Was heading towards support before Putin reversed the trend and now we are up against resistance. 1361.65 was last significant high back in October and if we break that high then the down trend is technically over.
Resistance: 1,350/1427/1480
Support: 1,265/1,180/1,040

David Long/ Proprietary Trading Manager

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