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Risks in financial markets are increasing, and investors had a snapshot of what sort of market reaction could come if Russia invades Ukraine. Last Friday saw the US warn of an imminent attack which sent oil prices 5% higher over two trading days, with Brent fast approaching the $100 price tag. Equity markets also suffered steep losses as the S&P 500 dropped 1.9%, and the Nasdaq Composite tumbled 2.8%. Asian markets are catching up with Friday’s Wall Street losses with Japan’s Nikkei falling more than 2%, while markets in China, Hong Kong, and South Korea are all in the red.

The S&P 500, Nasdaq, and Dow Jones Industrial futures are all pointing towards a cautious start for the week, and US Treasuries are stable as investors await more information.

The deterioration in the Russia situation is stoking massive concerns about price pressures as it could lead to disruption in energy and agricultural supplies. Markets are already on edge over how central banks will act to tame inflation, currently sitting at multi-decade highs. Moreover, US consumer price data released on Thursday gave a strong impression that central bank policymakers have been caught off guard and need to speed up the tightening cycle.

Interest rates futures are now implying a 60% chance of the Federal Reserve delivering a 50-basis point rate hike on March 17, up from 20% before the CPI release. That has led to further flattening in the US yield curve where the widely watched spread (10-year minus 2-year Treasury yields) has reached 0.42%. An inverted yield curve would suggest to many that a recession is looming, and that would likely cause a further selloff in risk assets, so investors need to keep a close eye on bond yields over the coming weeks.

This week, the US economic calendar provides new updates on producer prices, retail sales, housing starts, existing home sales, and the FOMC minutes. However, it is speeches from the Federal Reserve officials that will move interest rates expectations with New York Federal Reserve Bank President John Williams, St. Louis Federal Reserve Bank President James Bullard, Cleveland Federal Reserve Bank President Loretta Mester, and Chicago Federal Reserve Bank President Charles Evans all scheduled to speak.

Given all market forces in play, the only certainty here is further market volatility. As a result, long-term investors will be looking for bargain opportunities while traders try to play the intraday moves.

Daily Pivots: (S1) 1.1269; (P) 1.1319; (R1) 1.1358; More...

Intraday bias in EUR/USD remains neutral for the moment, and outlook is unchanged. Further rise will remain mildly in favor as long as 1.1265 minor support holds. On the upside break of 1.1482 will target 38.2% retracement of 1.2348 to 1.1120 at 1.1589 next. Sustained break there will argue that whole fall from 1.2348 has completed too and target 61.8% retracement at 1.1879. On the down, however, break of 1.1265 support will dampen this bullish view and bring retest of 1.1120 low instead.

In the bigger picture, the decline from 1.2348 (2021 high) is seen as a leg inside the range pattern from 1.2555 (2018 high). Sustained trading above 55 week EMA (now at 1.1613) will argue that it has completed and stronger rise would be seen back towards top of the range between 1.2348 and 1.2555. However, firm break of 1.0635 (2020 low) will raise the chance of long term down trend resumption and target a retest on 1.0339 (2017 low) next.

Daily Pivots: (S1) 1.3495; (P) 1.3534; (R1) 1.3572; More...

Range trading continues in GBP/USD and intraday bias remains neutral. On the upside, break of 1.3642 will resume the rebound to 1.3748 resistance. Firm break there will revive the bullish case that correction from 1.4248 has completed with three waves down to 1.3158. Further rally should then be seen to retest 1.4248 high. On the downside, however, break of 1.3356 will bring retest of 1.3158 low.

In the bigger picture, as long as 38.2% retracement of 1.1409 to 1.4248 at 1.3164 holds, up trend from 1.1409 (2020 low) is still in progress. On resumption, next target will be 38.2% retracement of 2.1161 to 1.1409 at 1.5134. Nevertheless sustained break of 1.3164 will argue that whole rise from 1.1409 has completed and bring deeper fall to 61.8% retracement at 1.2493.

Daily Pivots: (S1) 0.9231; (P) 0.9252; (R1) 0.9265; More....

Intraday bias in USD/CHF remains neutral and outlook is unchanged. Overall, further rally is mildly in favor as long as 0.9090 support holds. On the upside, break of 0.9372 will resume the choppy rally from 0.8925 to 0.9471 high. However, break of 0.9090 will turn bias back to the downside for 0.8925 support instead.

In the bigger picture, medium term outlook will be neutral at best as long as 0.9471 resistance holds. Larger down trend could still extend through 0.8756 (2021 low). However, firm break of 0.9471 will argue that the trend has already reversed and rebound the rally from 0.8756 with another impulsive move.

Daily Pivots: (S1) 115.12; (P) 115.43; (R1) 115.86; More...

No change in USD/JPY's outlook and intraday bias stays mildly on the downside. Corrective pattern from 116.34 is in its third leg. Deeper fall would be seen to 114.14 support first. Break will target 113.46 next. On the upside, firm break of 116.34 will resume larger up trend from 102.58. Next target is 118.65 long term resistance.

In the bigger picture, no change in the view that rise from 102.58 is the third leg of the up trend from 101.18 (2020 low). Such rally should target a test on 118.65 (2016 high). Sustained break there will pave the way to 120.85 (2015 high) and raise the chance of long term up trend resumption. This will remain the favored case as long as 55 week EMA (now at 111.21) holds.

Daily Pivots: (S1) 0.7092; (P) 0.7122; (R1) 0.7157; More...

Intraday bias in AUD/USD remains neutral and outlook is unchanged. Further rise would remain mildly in favor as long as 0.7050 support holds. Above 0.7247 will target 0.7313 resistance. Decisive break there argue that correction from 0.8006 has completed at 0.6966, after hitting 0.6991 key support. Outlook will be turned bullish for 0.7555 resistance next. On the downside, however, break of 0.7050 support will bring retest of 0.6966 low instead.

In the bigger picture, focus remains on 0.6991 key structural support. Sustained break there will argue that the whole up trend from 0.5506 might be finished at 0.8006, after rejection by 0.8135 long term resistance. Deeper decline would then be seen back to 61.8% retracement of 0.5506 to 0.8006 at 0.6461. Meanwhile, strong rebound from 0.6991 will retain medium term bullishness. That is, whole up trend from 0.5506 is still in progress.

Daily Pivots: (S1) 1.2703; (P) 1.2743; (R1) 1.2767; More...

Range trading continue sin USD/CAD and intraday bias stays neutral. Further rally is mildly in favor with 1.2634 support intact. On the upside, break of 1.2795 will resume the rally from 1.2448 to 1.2963 resistance next. However, break of 1.2634 support will turn bias back to the downside for 1.2448 support instead.

In the bigger picture, focus stays on 38.2% retracement of 1.4667 (2020 high) to 1.2005 (2021 low) at 1.3022. Sustained break there should confirm that the down trend from 1.4667 has completed after defending 1.2061 long term cluster support. Further rise would then be seen towards 61.8% retracement at 1.3650. However, rejection by 1.3022 will maintain medium term bearishness. Break of 1.2005 will resume the down trend from 1.4667 and that carries larger bearish implications too.

Daily Pivots: (S1) 155.50; (P) 156.18; (R1) 157.06; More...

Intraday bias in GBP/JPY stays neutral at this point. On the downside, break of 155.11 resistance should confirm rejection by 158.19 resistance. Intraday bias will be turned to the downside for 152.88 support, to extend the corrective pattern from 158.19 with another falling leg. However, on the upside, sustained break of 158.19 will resume larger up trend.

In the bigger picture, price actions from 158.19 are seen as developing into a consolidation pattern to up trend from 123.94 (2020 low). Downside should be contained by 123.94 to 158.19 at 145.10 to bring rebound. Firm break of 158.19 will resume the up trend to long term fibonacci level at 167.93. However, sustained break of 145.10 will raise the chance of trend reversal and target 61.8% retracement at 137.02.

Daily Pivots: (S1) 130.00; (P) 130.70; (R1) 131.34; More....

Intraday bias in EUR/JPY remains on the downside and outlook is unchanged. Corrective pattern from 134.11 is extending with another falling leg. Deeper fall would be seen to 128.23 support first. break will target 127.36 support and below. On the upside break of 133.13 will bring retest of 134.11 high.

In the bigger picture, price actions from 134.11 are currently seen as a consolidation pattern only. As long as 38.2% retracement of 114.42 (2020 low) to 134.11 at 126.58 holds, up trend from 114.42 is still in favor to continue. Break of 134.11 will target long term resistance at 137.49 (2018 high). However, sustained break of 126.58 will raise the chance of bearish reversal. In this case, deeper decline would be seen to 61.8% retracement at 121.94, and possibly below.

Daily Pivots: (S1) 0.8339; (P) 0.8363; (R1) 0.8379; More...

EUR/GBP's fall from 0.8476 is still in progress and intraday bias stays on the downside for retesting 0.8282 low. Sustained break of 0.8276 key long term support will carry larger bearish implication. On the upside, above 0.8411 minor resistance will turn bias back to the upside for 0.8476 resistance. Break there will resume the rebound from 0.8282.

In the bigger picture, price actions from 0.9499 (2020 high) are still seen a corrective pattern that should be contained by 0.8276 long term support (2019 low). Bullish convergence condition in daily MACD and break of 55 day EMA raises the chance that it might be completed. Sustained trading above 38.2% retracement of 0.9499 to 0.8282 at 0.8747 will affirm this bullish case. However, sustained break of 0.8276 will argue that the long term trend has reversed.