Daily Analysis Report 24 Feb '2022

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EnclaveFX
Feb 24, 2022
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EUR/USD


During the Asian session, the euro has been actively depreciating versus the US dollar, updating local lows from January 31 and nearing firm support at about 1.1200. Another escalation in Ukraine’s east has put significant pressure on the single currency’s positions on Thursday morning. The announcement by Russian President Vladimir Putin of a special military campaign in Donbas sparked a surge in demand for safe assets and sent the currency down to its lowest level since 2016. President Joe Biden responded by saying that the United States and its allies and partners would “act in a united and decisive manner.”

The US president is expected to meet with other G7 leaders to discuss the present situation. Meanwhile, investors weighed in on the eurozone’s January inflation statistics, released the day before. The CPI remained near 5.1 percent at the start of the year, as expected, but the price growth rate dropped slightly from 0.4 percent to 0.3 percent every month. High inflation is anticipated to pressure the European Central Bank’s (ECB) views when it meets in March for its next meeting. The European Central Bank maintains a loose monetary policy and continues its quantitative easing program.

GBP/USD

During the morning session, the British pound is trading lower versus the US dollar, challenging the 1.3500 support level. Traders’ attention has been drawn to the situation in Eastern Europe, which has deteriorated dramatically since Vladimir Putin ordered a special military action in Donbas on Thursday. Investors strive to diversify their risk asset portfolio while also considering the Bank of England’s possibilities for tightening monetary policy. The pound’s positions were also moderately influenced by the UK inflation statistics released the day before. In a statement, Andrew Bailey, the Governor of the Bank of England, stated that there are currently systemic inflationary threats and that the term “temporary” should no longer be used to describe the current price increase in the country.

AUD/USD

During the Asian session, the Australian dollar fell against the US dollar, retreating from local highs from January 20, which had been updated the day before. The instrument is actively testing the 0.7200 level for a breakdown, primarily in response to news from Eastern Europe. The situation on the Ukrainian border deteriorated when Russian President Vladimir Putin announced a special military operation in the Donbas region. Risk currencies fell sharply in response, with the Russian ruble and the Ukrainian hryvnia setting fresh lows.

Today’s macroeconomic numbers from the United States also attract investors’ attention. The updated annual statistics on GDP dynamics for Q4 2021 are likely to be released in particular. The US economy is expected to grow by 7%, 0.1 percent more than the prior estimate. During the day, information on jobless claims and data on January’s new home sales will be released.

USD/JPY

In Asian trading, the US dollar has been slipping against the Japanese yen, maintaining near the local lows of February 22. In response to the alarm signals from Eastern Europe, the USD/JPY is poised to test 114.50 for a breakdown. After initiating a special military operation in Donbas, which Russian President Vladimir Putin sanctioned, demand for safe assets soared dramatically this morning. In addition, traders anticipate releasing a huge batch of macroeconomic data from the United States today. New projections of GDP dynamics for Q4 2021 and figures on the dynamics of New Home Sales in January will be released. Japan’s noteworthy statistics will be released only tomorrow, with the release of data about CPI(consumer price index) for the month of February.

XAU/USD

During the Asian session, gold prices rose sharply, revisiting record highs and testing the level of 1950.00 for a breakout. Investors are fleeing risk in the face of a marked worsening in the situation in Eastern Europe provides reassuring support for the instrument. Russian President Vladimir Putin ordered a special military action on Donbas territory early this morning. A significant set of macroeconomic figures from the United States is slated to be released today, but investors will likely overlook it.