European traders are reacting to the news overnight that Russian forces have attacked a Ukrainian power plant. Although fire has reportedly been contained, the broader implications of this show the depths that Putin’s Russian military will go to in this war with Ukraine. Apparently, risking a nuclear disaster in eastern Europe is part of the Russian war strategy. 

Major markets subsequently risk negative once more, with a focus on selling European assets. European indices are falling and continue to underperform Wall Street, whilst the euro and to a slightly lesser extent, Swiss franc and British pound are also being sold. 

For data traders, the payrolls report will be key today. Traders are looking for 400,000, but anything considerably better (maybe north of 500,000) would be USD positive, especially if it comes with stronger wages growth.


Sentiment increasingly negative: Markets are reacting negatively to the news of an attack on a Russian nuclear power plant. Anything European focused is coming under pressure. Indices are lower and the EUR is underperforming again. AUD and NZD are the big outperformers in the forex majors.

Treasury yields have moved lower again: A flight to safety has driven US yields lower once more. Although they are off earlier lows, the US 10 year yield is down -3bps. [Sentiment negative] 

US/Iran nuclear deal needs extra work: Talks are ongoing and there are outstanding issues that need to be resolved. However, US officials have noted significant progress in the talks. EU officials have said that they are in the final stages. [Potentially corrective for oil] 

Oil price is steady: The lack of progress in the US/Iranian talks contributed to oil’s spike higher in recent days, but the price is steady this morning. 

UK/EU post-Brexit trade talks: Reports suggest that the UK is unlikely to trigger Article 16 ahead of elections that are taking place in Northern Ireland in May. The Ukraine war is a factor. 

Cryptocurrency continues to fall back: Bitcoin is lower again this morning, back below $41,000. 

Economic Data:

  • US Nonfarm Payrolls (at 1330GMT) Consensus is looking for +400,000 jobs (after last month’s 467,000). Average hourly earnings are expected to increase to 5.8% (from 5.7%).  


Broad outlook: Sentiment is negative once more across asset classes. 

Forex: EUR remains the main underperformer with GBP and CHF also negative. AUD and NAZD are the big outperforming currencies.

  • EUR/USD has fallen decisively below 1.1120/1.1140 which completes a breakdown from a 3-month range. This implies a decline towards 1.08 area. The price is the lowest since May 2020 and below 1.1000 would be a key moment. The next support is around 1.0890. Resistance is mounting around 1.1060/1.1120.
  • GBP/USD has fallen away again and is more back towards a test of 1.3270 support. This protects the market from a test of the bigger support at 1.3160. Resistance is initially 1.3350/1.3390 under the more considerable 1.3440. 
  • AUD/USD has continued an incredible run higher, now decisively through the key resistance band 0.7270/0.7315. This marks the breakout of a three-month trading range and breaches a 12-month downtrend. A close above 0.7370 next resistance also opens 0.7430.  The old resistance band 0.7270/0.7315 is now supportive.

Commodities: Precious metals are consolidating, whilst oil continues to soar higher.

  • Gold is edging higher more than surging. However, there is a run of higher daily lows and a move above $1950 would open $1974 again. We look to use near term weakness as a chance to buy still. The price is holding above $1914 initial support and above the four-week uptrend support around $1913 today. Support at $1877/$1886 is still key. 
  • Silver has been strong but is consolidating under the $25.53/$25.61 resistance. With the strength of the 4-week uptrend, near term unwinding moves are still a chance to buy for continued testing of the medium-term trading range resistance.
  • Brent Crude oil The negative divergence (slowing upside momentum) that appeared yesterday on the hourly chart is starting to weigh on the outlook as the run higher has stalled in the past 24 hours. There is a growing potential for some profit-taking. As the market has again fallen over intraday this morning the reaction to $109.35 support will be important. This is the initial support.

Brent Crude Oil

Indices: Wall Street continues to outperform the struggling European indices.  

  • S&P 500 futures have backed away from 4398 resistance but the selling pressure has been contained to an extent this morning. The support of near term lows between 4227/4275 is holding for now. However, there is still negative pressure with the downtrend of the past two months up at 4458 today and given the negative configuration on momentum, a recovery cannot find traction.
  • DAX fell again overnight and hit another 12 month low at 13,282. An initial rebound is falling over again and the selling pressure continues. Breaching 13,300 the next support is at 13,000. Initial resistance is 13,710/13,790 and a move above 14,123 would be needed to signal any real recovery.
  • FTSE 100 is now beginning to suffer the fate of the European indices. There has been a sharp fall overnight and a sell into a rebound this morning. The next support is at 6977 (November 2021 low) looks set to be tested. Initial resistance is at 7170/7210.

Support and Resistance levels