The Euro plunged to the lowest level since May 2020 against the US dollar. Technically the overall momentum remains bearish as investors remain concerned over the Russian invasion of Ukraine will damage the Eurozone economy. However, considering the recently strong bearish momentum, the currency pair is trading near the critical demand zone on the weekly time frame. The next strong support for the Euro stands near the level of 1.1020/00.
Wall Street ended sharply lower on Tuesday after the Russia-Ukraine crisis deepened on the sixth day of the invasion while the US futures slightly recovered from the early lows following the recent report says the second round of negotiations between Russia and Ukraine will reportedly still take place. The negotiations will be held on the Polish-Belarusian border.
Crude oil futures reached a new session high on Wednesday after reports indicated that Russia has intensified the bombardment of Ukrainian cities and a large Russian convoy was approaching the capital Kyiv.
In the currency market, the Canadian dollar remains strong against the Euro and British pound ahead of the Bank of Canada meeting. Meanwhile, the US dollar index hits a fresh 20-month high of 97.75 on Wednesday.
The Safe-haven metal slightly retreats from the daily highs after Russia says 'ready' to continue talks with Ukraine Wednesday night. On the other hand, the gold investors also waiting for Fed chair Powell’s appearance in Congress to give his semiannual monetary policy update.
On the data front, the U.S. Feb ISM manufacturing index rose +1.0 to 58.6, stronger than expectations of 58.0. The US Manufacturing PMI was revised lower to 57.3 in February of 2022, from a preliminary estimate of 57.5 but above the previous month's final reading of 55.5.
Moving ahead today, the important events to watch:
US – ADP employment report: GMT – 13.15
CANADA – BOC interest rate decision and statement: GMT – 15.00
Worldwide, more than 425 million people have been confirmed infected and more than 5.91 million have died. The United States has confirmed over 78 million cases and has had more than 920,000 deaths from COVID-19, the highest totals in the world.
Technical Outlook and Review
DOLLAR INDEX: The index hovers near the fresh weekly highs. Moving ahead to the North American session, the USD traders should closely monitor the release of U.S. ADP data.
The important levels to watch for today: Support- 97.40 and 97.20 Resistance- 97.80 and 98.10.
GOLD: Gold price retreats back to near the key support area 1930. If the metal break and close below 1930, will head towards the next support level which is located near 1920 then 1900. On the upper side, 1950 remains the key resistance to watch.
The important levels to watch for today: Support- 1930 and 1900 Resistance- 1950 and 1980.
Quote of the day - "Learn to take losses. The most important thing in making money is not letting your losses get out of hand." -Marty Schwartz.