A weekend packed with geopolitical developments surrounding the Russian invasion of Ukraine has caused significant opening gaps to major markets as trading has resumed on Monday morning. A flight to safety has been the main theme (due to the threat of nuclear weapons and the ramifications of Russian banks being excluded from SWIFT). The key will now be how traders respond to these gaps. A degree of unwinding of the opening moves is taking hold. Gaps do tend to be filled, but in doing so will they be “closed”?

Geopolitics remains front and centre, with a proposed meeting between Russian and Ukrainian officials set to take place. On the data front today, it is a quiet day ahead for the economic calendar, aside from the ECB President Christine Lagarde who is speaking later. However, don’t worry data traders, as the rest of the week is packed with tier one announcements.


Sentiment has been negative initially: Opening gaps lower on higher risk assets (indices, AUD, NZD), with safe-haven assets (Gold, USD, JPY) gapping higher. 

Treasury yields gap lower: A rush to buy the safety of US Treasuries has resulted in a -8bps gap lower on the US 10 year yield. However, this move is being unwound. [Risk negative] 

Russian central bank rate hike: The central bank has increased interest rates to 20% (from 9.5%) and introduced forms of capital control to restrict the selling pressure of Russian assets. 

Russian Rouble sell-off: The Russian Rouble is currently c. -28% with USDRUB jumping to 106 (from 83 at Friday’s close).

Russia/Ukrainian officials to meet: The border of Belarus and Ukraine will supposedly be the venue of a meeting between the two sides. How this goes (if at all) and whether it is a complete non-starter will be key newsflow for today.

Co-ordinated Western response grows: Providing military equipment including planes will significantly increase the capability of the Ukrainian resistance to the invading Russians. 

ECB President Lagarde to speak: Lagarde is unlikely to say too much but any dovish hints over monetary policy would be seen as EUR negative. [Potentially EUR negative]

Cryptocurrency lower but trying to form support: Bitcoin is still seen as a risk asset and as such as been under selling pressure again today. However, this pressure has been relatively contained, for now, rebounding from $37,000. 

Economic Data:

  • There is no major data due today


Broad outlook: Risk-off again. Out of high-risk assets and into safe-havens. However, the initial gaps are retracing slightly. 

Forex: USD and JPY have been strong, with EUR the big underperformer.

  • EUR/USD gapped down to the range floor around 1.1108 but is trying to rebound again this morning. However, selling into strength remains the strategy for now and further pressure on the 1.1106/1.1120 support is likely. It looks to be a theme of underperformance for EUR now. Initial resistance at 1.1200 under the more considerable 1.1270/1.1280 resistance.
  • GBP/USD has gapped lower but rebounded from 1.3315. yesterday. A close under 1.3357 (old Jan low) would suggest continued deterioration. Resistance at 1.3425/1.3440 is growing.
  • AUD/USD is one of the main underperformers today but is reacting well to the gap lower to rebound from 0.7160. The outlook is highly uncertain in the middle of the range above support now at 0.7085/0.7095. Initial resistance at 0.7237 from Friday’s high.

Commodities: Precious metals have gapped higher but are threatening to unwind the moves. Oil is strong again.

  • Gold gapped higher and hit $1929 before unwinding the move. There is a threat of losing positive momentum and the support band $1877/$1886 will be key. Also, watch the four-week uptrend support around $1890. 


  • Silver has gapped higher but the move has lost momentum and has almost unwound back to Friday’s closing level. Significant uncertainty remains but the basis of a near 4-week uptrend remains. The support band at $23.84/$24.00 remains key.
  • Brent Crude oil has been extremely volatile in recent sessions. A spike higher with the gap at the open has brought the price back above $100 from Friday’s low at $95. However, the move higher is looking slightly more tentative again. Initial resistance is at $102.40 with support at $98.95.

Indices: Equities have gapped lower again to unwind Friday’s considerable gains.  

  • S&P 500 futures were strong up to 4383 on Friday but gapped down to a low of 4251 this morning. The market is now looking to unwind this gap move. Holding 4228 was important near term however, this is still highly volatile to geopolitical developments.
  • DAX gapped sharply lower from Friday’s high of 14,676 but has started to build from 13,940 this morning. Still highly volatile and reactive to geopolitical developments. The reaction this morning to the gap down has been encouraging.
  • FTSE 100 has moved lower initially but has started to build support at 7315. This remains highly volatile (albeit less so than other major indices) and resistance has been formed now at 7559.

Support and Resistance levels