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Weekly Market Analysis: 14 February 2022


The currency markets may be volatile this week as a result of rising tensions between Russia and Ukraine. On Friday’s late session, the US stated that Russia could invade Ukraine at any time, causing a sell-off in the stock market, which could impact risk currencies, such as the Australian dollar.

The USD and JPY both rose with the shift in risk sentiment, which is expected to continue this week despite upcoming news events.

On the other hand, the United States’ inflation rate of 7.5 per cent has prompted many Fed Presidents from various states to call for aggressive interest rate hikes in the future. The President of the Fed has proposed a range of 10 basis points to 100 basis points to suppress excessive inflation, which has caused the yield on 10-year US bonds to rise to 1.91 per cent. 

This week, market participants will be focusing on the developments in the Russia-Ukraine conflict as well as US economic data such as PPI, Retail Sales, and FOMC meeting minutes, which will cause the currency market to fluctuate again, with a tendency to strengthen the US Dollar index.

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Source: Forex Factory | Time: GMT+8


Last week, the USD Index was trapped above the 95.10 level, but it managed to break past the 95.56-95.67 resistance area and rise back over the 96.00 mark.

If we look at the daily period this week, we can see that the USD could rise to 96.60. Meanwhile, the price movement in the H4 period shows that the USD is still rising.

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Gold increased because of the consequences of tensions between Russia and Ukraine since Gold is usually a haven when geopolitical tensions emerge. This week, we will watch if Gold continues to track the evolution of these conditions.

However, safe-haven circumstances will have an impact on the USD’s strength, especially if the FOMC meeting this week presents a hawkish opportunity for the USD.

Technically, we can see that Gold has already broken through the 1850 level and is attempting to reach the 1871-1876 level (the highest level in November 2021).

Looking at the daily timescale, we can see that Gold may be slightly constrained, but still attempting to enter the 1861-1871 range, with a potential breakout to 1877.

If the USD manages to rise and have an influence on Gold, the possibility of a return to the 1832 correction is very real.

In the medium term, we can see Gold going towards the 1842-1849 range before deciding on a new path in the H4 period.

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