Russia’s
military operation in Ukraine, that started on February 24, set the world on
fire. Russia invaded Ukraine, throwing Ukrainian troops back from the contact
line at Donetsk and Lugansk separatist regions. Troops then went from the South
to the East and then to the North, moving deeper into Ukrainian territory.
Numerous eyewitness videos confirm Russian military is on the outskirts of the
Ukrainian capital of Kiev and have even broken into some districts of the city.
The United
States, the United Kingdom, and the European Union seem to be in no hast to
implement the “devastating” sanctions
against Russia, presumably, leaving them until the last minute when the territory of Ukraine will
be completely occupied by Russia. Or, maybe, the anticipation of these
sanctions may act as a boomerang and hit their economies. Nevertheless, the
market sees that the logic behind the invasion of Ukraine has restricted the
purchase of oil and gas from Russia – oil prices are sky-rocketing, inflation
is soaring, and more hawkish Federal
Reserve (Fed) monetary actions are not very sustainable. Thus, a rebound of the
U.S. stock market on Thursday when the S&P 500 broad market index closed
the day 1.4% up, could be justified. However, it is hard to expect this rebound
to continue, as well as a steady further decline of stocks. Technically,
futures on the S&P 500 index are within the downward trend, with targets at
4100-4150 points, which have already been met. This is curbing the index from a
further decline. So, a sell position opened at 4430-4450 should be partially
closed at these levels. The other part of the position should be limited by a
stop-loss order to secure at least a minor profit.
The oil
market is in line with the “$100 per barrel” scenario. And the technical
routine of this scenario is completed. Speculators are now running a free
routine that may suggest some prices spikes to $105.00 per barrel of Brent
crude or even to $110.00. However, traders should start thinking about the
possible upcoming decline of crude prices that may start in the second half of
March.
The gold
market is disappointed with the sanctions against Russia after the U.S. and EU
announced a rather weak list of measures in response to the Russian invasion of
Ukraine. Gold prices fell from $1973 per troy ounce to $1880 and stabilised
close to $1910 per ounce. In the month of March gold prices are expected to
decline. So, it is hard to expect they will go over $1940 now. Anyway,
investors should keep an eye on a possible strong drop in gold prices.
A wide
selloff of the assets led to the strengthening of the U.S. Dollar. The EURUSD
fell below bold expectations to 1.10500-1.11500. So, it is time for the
Greenback to step back and for EURUSD to stabilise at the current levels.
GBPUSD has
changed its trend to the downside with the target at 1.32000-1.32500 and
already hit the 1.32700 level. By European midday on Friday, the pair returned
above 1.33700. The next week is expected to start with a rebound towards
1.34300-1.34500 that could be used to open sell positions with the target at
1.33000-1.33500 that could be reached by the end of the next week.