Risk aversion returns as Ukraine crisis escalates, Fed Powell to speak
AUDUSD => The pair falls from 2-week high
Nike => The stock trades down 20% this year
DAX => The index eases from 14500
AUD/USD falls as the market mood sours
AUD/USD rose 1.1% in the previous week, rising from 0.7164 to a high of 0.7400, after the USD failed to capitalize on a more hawkish Fed.
The US central bank hiked rates by 25 basis points and signalled that it would look to hike rates six more times this year.
Meanwhile, the Australian dollar was supported by a strong recovery in gold prices, which rose to $1950 and encouraging jobs data, which overshadowed concerns over the Russian war.
Today the Aussie is falling after the PBoC left interest rates on hold and as the market mood deteriorates. There is no high impacting US or Australian data due.
However, both the Fed’s Chair Powell & the RBA governor Philip Lowe are expected to speak, which will drive the pair, in addition to Ukraine headlines.
Whilst optimism surrounding peace talks remains, the heavy bombing of Kyiv is keeping the market on edge, boosting USD safe-haven demand.
Where next for AUD USD?
AUD/USD has been extending its rebound from 0.6970 low reached at the end of January.
The pair has run into resistance at 0.7440 for a second time, easing lower. The pair remains above its 50 & 200 sma and the RSI remains in bullish territory keeping the buyers optimistic of further upside.
However, bulls must break above 0,7440 for further upside towards 0.7575.
Meanwhile, sellers will be looking for a move below 0.7310 the rising trendline support and the January high, in order to open the door to 0.7250 the March 6 low.
Nike Q3 earnings
Nike is due to publish Q3 earnings after the closing bell today, with the share price down around 20% so far this year, underperforming the broader market.
Nike is heavily exposed to ongoing supply chain issues and international headwinds. Slowing sales in China hurt revenue in Q2 and are expected to rise back over $2 billion in Q3.
However, the kay market could weaken again going forwards as COVID spreads and lockdown restrictions grow.
Nike is also paring back business in Russia. Wall Street expects revenue to rise 2.6% YoY to $10.6 billion, and even though margins are set to improve thanks to growing e-commerce, diluted EPS is forecast to fall 19% to $0.72, down from $0.9 the previous year.
DAX eases lower after stellar 2-weeks
The DAX rallied 5.7% last week, putting gains at 9% across the past two weeks.
The DAX has benefited from optimism surrounding peace talks, which according to Turkey, Moscow and Kyiv are close to agreement on crucial points, although talks could still go on for weeks.
China’s top envoy to Washington also pledged that China would work to de-escalate the war.
Today the index is falling as, attention remains on Russian developments after heavy bombing in Ukraine overnight. German wholesale inflation data, as measured by the PPI is also in focus.
Expectations are for wholesale inflation to rise to the highest rate on record in February as energy prices continued to rise, even before Russia invaded Ukraine.
|German PPI YoY Feb||Expected: 26.1% (1.1%)||Previous: 25%|
Support can be found at 14070 (low 18 March) and 13500 (low 14th March).
Resistance for the pair can be seen at 14770 (50 sma) and 15500 (200 sma).
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