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Market Focus

US stocks rallied on Thursday, clawing back from losses one day before as declining jobless claims added some confidence to the US market. 187,000 people filed for unemployment, the lowest since 1969. The Nasdaq Composite led the market, rebounding 1.93%, followed by the S&P 500, which rose 1.43%. The Dow Jones Industrial Average added 1.02% to 34707.94 at the end of the day.

Chip stocks led the market with shares like Nvidia among the favourites of traders to buy in the market upswings. Chips companies look to benefit from the economic recovery from Covid. Nvidia Corp. was up 9.82%, Intel Corp. climbed 6.94%, and AMD added 5.8%.

As the western countries continue to impose sanctions on Russia. Russia now is considering selling its natural gas and crude oil for bitcoin as payment. Though the US has banned Russian oil, it is unlikely European countries will follow since EU countries are highly dependent on Russian energy. In the meantime, Russia is looking to diversify its reserve currency as the ruble has heavily depreciated.

Main Pairs Movement

Gold extended above $1,955 amid geopolitical tensions and inflation concerns. Gold was underpinned on the hawkish stance of the US president Joe Biden in a NATO meeting on Thursday. The US is working with NATO to prepare for the possibility that Russia might deploy nuclear or chemical weapons if needed. At the same time, gold was supported as the market chose gold as a hedge for inflationary pressures.

USDJPY hit multi-year highs, reaching 121.147. The Japanese Yen kept up its bearish move against the US dollar as geopolitical tensions resumed in Ukraine.

Both EURUSD and GBPUSD declined as broad US dollar strength across the board helped the US dollar to keep a firmer stance. EURUSD was down 0.05% and GBPUSD was down 0.13% at the end of the day on Thursday.

AUDUSD added 0.18% on the back of positive risk sentiment. The Aussie was supported as the commodities prices continued to surge due to the inflationary pressure.

Technical Analysis

GBPUSD (4-Hour Chart)

The British pound dropped 0.44% against the dollar over the previous trading day as the Greenback rose from recent weakness.  Cable has continued to drop today as market participants rotate into the Dollar as the U.S. Labor Department reported the lowest levels of jobless claims since 1969. Market sentiment remains on alert, though, as no new development has emerged from the Ukraine and Russia war as experts fear that president Putin could resort to nuclear options. After an emergency NATO summit, the U.S. president has announced $1 billion in new security assistance to Ukraine. Russia’s inability to swiftly capture Kyiv could result in escalating cruelty by the Russians, especially when global economies continue to wage economic war on the Kremlin.

On the technical side, Cable has consolidated around the 1.318 price region. A soft support level has formed around the 1.316 price region. RSI for Cable sits at 49.78 as of writing. On the four hour chart, Cable currently trades above its 50 and 100-day SMAs but below its 200-day SMA.

Resistance:  1.3282

Support: 1.3131, 1.3018

EURUSD (4-Hour Chart)

The euro-dollar pair traded lower as the U.S. reported better than expected jobless claims reports. The strong dollar has wiped out EURUSD’s early advances during the Asian trading hours. Market participants will now turn their focus to the EU summit held on the 25th. A new wave of sanctions could come out of this meeting as EU leaders regroup. Further economic sanctions, however, could be opposed by countries dependent on Russian energy, such as Germany.

On the technical side, EURUSD has consolidated around our previously estimated support level of 1.0985, but this support level seems relatively weak as the Dollar has revived its dominance. RSI for the pair sits at 42.19 as of writing. On the four hour chart, EURUSD is trading below its 50, 100, and 200-day SMAs.

Resistance: 1.1127

Support: 1.0985, 1.0845

XAUUSD (4-Hour Chart)

Gold has continued to advance as the Ukraine Russia war stalls on. Military experts have speculated that with the lack of progress on the ground, president Putin could resort to deadly nuclear weapons to expedite his ambitions. Furthermore, with the EU summit and NATO gathering happening over the course of today and tomorrow, the global community could impose further sanctions on the crippled Russian economy, in turn adding pressure on Putin to end the war sooner. Rising global interest rates have also helped the precious metal gain traction on its recent upward hike.

On the technical side, XAUUSD has broken through our previously estimated resistance level of $1961 per ounce and is rising towards the next level of resistance at $1972 per ounce. RSI for XAUUSD sits at 68.26, reaching overbought territory. On the four hour chart, XAUUSD is trading above its 50, 100, and 200-day SMAs.

Resistance: 1947, 1961

Support: 1918

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