Risk Rebound Continues Amidst Russia-Ukraine Peace Talks
Risk assets are again trading with a better tone this week with each of the benchmark equities indices track here in the green on Tuesday. The market has been rebounding firmly across recent weeks as traders continue to focus their optimism on a Russia-Ukraine ceasefire. The two sides are set to undergo a further round of talks this week with both countries expressing hopes for a resolution and an end to the violence. While talks so far have proved fruitless, the heavy losses suffered by both sides, as well as the toll of Western sanctions on Russia, is leading traders to hope for a compromise.
Looking ahead this week, the main data focus will be on the US labour reports due on Friday. Following the prior month’s bumper set of figures, the market is expecting a somewhat softer reading this time around with expectations for a 485k result (down from 678k last time). Nevertheless, a reading in this region will still be bullish for USD particularly if the unemployment rate is seen falling further and wage growth continues to improve. The Fed has outlines its clear, hawkish intentions, along with the upside risks in its outlook. With this in mind, it would likely take a dismal set of results on Friday to derail the current USD move.
Technical Views
DAX
The recent rally in the DAX has seen the market breaking above the 14170.79 level. Price is now sitting just below the bear channel top and 14791.27 level. With both MACD and RSI bullish, the focus is on a further break higher here targeting a move back up to 15636.39 next.
S&P 500
The rally in the S&P has seen the market breaking out of the bear channel from ATH and above the 4475.25 level. Price is now testing the 4575.50 level and, with both MACD and RSI bullish, the focus is on a continuation higher towards the 4744 level next.
FTSE
The FTSE has seen an explosive move off the 6818.3 lows. While momentum has fizzled out somewhat recently, the rally is still intact and with both MACD and RSI bullish, the focus is on a continuation higher. The next challenge for bulls will be the 7558.7 level, ahead of the bull channel top and 7691.6 level.
NIKKEI
The rally off the 24619.3 lows has seen the market trading back up to test the top of the large falling wedge pattern. Price is currently being held here (around the 28356.6 resistance). However, with both MACD and RSI bullish, the focus is on a continuation higher towards the 29464.9 level next.
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.