American equities retreated for the second straight day this week as Vladimir Putin’s attack on Ukraine intensified. The Russian military bombed multiple residential areas on Tuesday, killing hundreds of civilians. At the same time, two of the biggest shipping companies, Maersk and Mediterranean, announced that they will stop picking and dropping cargo in Russia. That will be a major blow to Russia and western countries because it will lead to higher prices. The EU announced that it was reviewing measures to ban VTB and Sberbank from Swift, a measure that will lead to more challenges for the banks.
The price of crude oil and natural gas jumped sharply as investors reacted to new developments in Europe. Analysts expect that there will be a significant demand and supply problem because of the vital role that Russia plays in the industry. In a statement on Tuesday, Saudi Arabia announced that it will stick to the production target set by OPEC+. The challenge is that some countries like Nigeria are struggling to hit their production target in the current deal. Analysts also believe that releasing oil supplies from strategic reserves will not have a major impact on prices.
The economic calendar will have some important events today. In the morning session, the European Union will publish the latest consumer inflation numbers. Analysts expect the data to show that the headline CPI jumped from 5.1% to 5.3% in February. Still, there is an expectation that the Russian crisis will lead to higher prices in March as well. Germany will publish its employment numbers while the Bank of Canada will deliver its second decision of the year. The EIA will publish its inventories data in the American session.
XBRUSD
The XBRUSD pair has been in a strong bullish trend in the past few months. The pair jumped to a high of 105p, which was the highest level in more than a decade. It has moved above the 25-day and 50-day moving averages while the MACD and the commodity channel index (CCI) pairs have pointed upwards. Therefore, the path of the least resistance for oil prices is higher as the crisis continues.
EURUSD
The EURUSD pair retreated as investors rushed to the safety of the US dollar. The pair is trading at 1.1140, which was the lowest level since last week. It has moved below the 25-day and 50-day moving averages while the MACD and the Relative Strength Index (RSI) has moved to the oversold level. The pair will likely break out lower as bears target the next key support level at 1.1100.
USDCAD
The USDCAD pair retreated in the overnight session as oil prices jumped. The pair is trading slightly above the key support level at 1.2648. It has moved below the 25-day moving average while the Force Index has dropped. It is between the 38.2% and 50% Fibonacci retracement level. Therefore, the pair will likely continue falling as bears target the next key support level at 1.2600.
