The moves today will be very quickly undone if Russian President Putin doesn’t come out very soon and declare the special military operation as complete and that he will remove troops from the cities of Ukraine. Each side will do its best to paint itself victorious, but we will follow the markets, not the news headlines. Today, euro traders are convinced that they see a light at the end of the tunnel.
Market Wrap
The economic calendar was once again quiet with no real market-moving data drops, so all ears were tuned into the news out of Turkey and the peace talks between Russia and Ukraine.
As the US session started, we had some job data. The Bureau of Labor Statistics job openings in the United States remained virtually unchanged in February when compared to January. The number of job openings came at near-record levels, at 11.266 million.
Following on from this morning’s UK housing data, the S&P Case-Shiller Indices, showed house prices in the United States rising 19.2% in January. Comparatively, this was a rise from 18.9% in December and surpassed market expectations. Over the same period last year, the 10-City Composite increased by 17.5%, up from 17.1% in December. Mortgage approvals in the United Kingdom fell slightly in February compared to January, the Bank of England reported on Tuesday. 71,000 approvals were granted, a decrease from 73,800 in January, but above the 12-month pre-pandemic average.
The US dollar had a big drop during the London session following a news report from the Russian defense minister. The euro was the big gainer, and this is what pushed the DXY around. A statement came across the wires that the main task of the Russian military operation within Ukraine was to liberate Donbas, with the main task of the first phase being complete.
Ukrainian negotiator Podoliak said that a ceasefire was being discussed around the same time. The dollar fell further on news that the Russians felt that the peace talks were constructive and will report to President Putin following an examination of Ukraine’s proposals. A meeting between the two country's leaders is also possible.
From then on, the US was detailing how Russian forces were moving away from Kyiv but the sentiment has gone from a possible tactical retreat to a redeployment. And that Russia is shifting gears back towards a continued major offensive.
The forex heatmap is still very undecided on whether it is a risk on or off. Though the euro has remained relatively strong all day. The biggest flip came into the yen which had been crushed these last couple of weeks.
Brent bounced off a line of support today. The high of the 16th of March had been marked up before and now we’re waiting to see if the energy markets are going to attempt a trend change, with a higher high and higher low, or whether this latest bounce is yet another lower high print. $111.95 per barrel is a key resistance level to watch.
This morning’s EURGBP analysis detailing the possible inverse head and shoulders pattern has taken a step further to play out. EURGBP has now breached the neckline, so I am waiting for a pullback to take a possible long.
Tracking the moves into the retail short position on ActivTrader also makes me think the EURGBP could be a decent long trade soon. This morning the short interest was around 60% so there has been an added 18% at least.
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