Markets continue to respond to the increased prospect of military conflict in Ukraine. Hawkish war rhetoric has ramped up over the weekend with the US and NATO allies openly speaking about an imminent Russian invasion. There has subsequently been a surge of selling of anything seen as high risk, with a flight to safety. Equity indices are getting hit, whilst in forex, we are seeing JPY and USD outperforming. Precious metals are also holding up well.

The coming days will be crucial as to how markets respond to this uncertainty of the conflict. Elsewhere there is no significant economic data to speak of, however, markets will also be keeping an eye out for the comments of the FOMC’s most hawkish voter, James Bullard. Bullard recently spoke of the potential for inter-meeting rate hikes by the Fed.   


Sentiment turns sharply negative: European indices are reacting with significant selling pressure following the late sell-off on Wall Street on Friday. Risk appetite is negative across major forex with JPY and USD outperforming, whilst AUD and NZD are sharply weaker. Precious metals were strong into Friday’s close but are more mixed today.

Treasury yields have fallen sharply: A big flight to safety has driven market participants back into Treasuries. An initial rebound this morning has fallen back again. Such big moves imply fear across major markets. [Risk appetite sharply negative] 

VIX back above 30: Wall Street volatility has spiked higher again. Equity markets are once more under highly volatile conditions. This will open the prospect of sharp moves either way. [Indices volatile]

Potential for Russia/Ukraine conflict in the next few days: US officials have publically said that they believe Russia could invade Ukraine in the next few days. This could be a tactic, but markets are reacting to this.

FOMC’s Bullard speaks again: Bullard is extremely hawkish (voter in 2022) and has caused markets to moves recently. He speaks again today at 1600GMT. [USD volatile] 

ECB’s Lagarde speaking at 1615GMT: The ECB President has also caused EUR some fluctuations recently. She tends to err on the dovish side. [Increased EUR volatility]

Crypto falls back: Crypto prices have fallen away, although interestingly not as much as equities. Bitcoin slipping back to $42,000.

Economic Data:

  • Japan GDP (at 2350GMT). Q4 GDP is expected to be +1.4% QoQ (after -0.9% in Q3).


Broad outlook: Broad negative risk appetite. JPY and USD are outperforming. European indices are sharply lower. Commodities are mixed following sharp moves higher on Friday. Markets are very fast-moving, so keep this in mind!

Forex: JPY and USD are the best performers, with AUD and NZD under the most negative pressure.

  • EUR/USD has broken below 1.1360 support and is still falling today. This move has brought it back into the middle of a trading range. With technical indicators neutral, we are now in a wait-and-see mode. We will know more once markets begin to settle. Support at 1.1270/1.1300 is about to be tested. 
  • GBP/USD has been relatively settled but is now falling to test 1.3490/1.3500 support. A breach on a closing basis would open for a move back towards 1.3355 key support. The initial resistance is at 1.3550.
  • AUD/USD is falling away again and is on the way towards a test of the higher low at 0.7050. A breach would open 0.6965/06990. 

Commodities: Precious metals supported on war talk. Oil unwinding the sharp move higher.

  • Gold has spiked higher on the war talk. Friday’s big bullish candle took gold to a three-month high. However, the risk is that the move is only short-lived and quickly unwinds. A sense of consolidation today. Initial support around $1841 and then $1832 again. Friday’s high was $1865.
  • Silver has moved sharply higher again on the war talk. It is sustaining the move today. Next resistance at $23.97 and then $24.70. The risk is an improvement in the geopolitical tensions would see the price unwinding. Key support band $22.80/$23.10.
  • Brent Crude oil has been very volatile again, spiking higher on Friday and turning back from $96.47 this morning. Oil is likely to be very volatile in the coming days with the elevated geopolitical tension. Key support is now at $90.50/$90.90.

Indices: Selling pressure is increasing as the European session has taken hold. Markets are very fast-moving this morning.  

  • S&P 500 futures A sharp downside break of 4438 implies c. -150 ticks towards the 4290 area. Resistance is mounting overhead as the move has continued this morning. The band now between 4427/4454 is now key overhead supply. Initial support at 4322.
  • DAX has fallen sharply and is now back into the medium to long-term support area 14,810/15,000. This area has frequently found willing buyers, but the near-term outlook is very fragile. 

German DAX

  • FTSE 100 has fallen sharply this morning to break the support band 7500/7540. However, the volatility is high and the market is off earlier session lows at 7485.

Support and Resistance levels