CRUDE OIL AND GOLD PRICES JUMP AS INVASION WORRIES RISE

US futures declined in early trading as geopolitical fears rose. Those tied to the Dow Jones declined by about 200 points while S&P 500 fell by about 35 points. The main concern among investors is that Russia seems to be forming a pretext for invading Ukraine. On Monday, as Putin held a security meeting in Moscow, Russian forces said that they had killed 5 Ukrainian officials. At the same time, he recognized two separatist groups in Ukraine. Therefore, there is a likelihood that stocks will be under pressure when the market opens later today.

The price of crude oil held steady as focus remained on geopolitics and the strength of the global economy. On Monday, data from the UK and the Eurozone showed that manufacturing and services activity did well in February. Therefore, this is a sign that the economy will keep doing well as countries reopen. Oil also rose as investors priced in supply constraints if western countries decide to impose sanctions on key Russian industries. While oil and gas will be spared from the sanctions, there is a likelihood that flows from Russia will be curtailed.

The US dollar was little changed on Tuesday morning. The key driver for the currency will be the upcoming consumer confidence data by the Conference Board. Analysts polled by Reuters expect the data to show that confidence declined from 113.8 in January to 110.0 in February. This drop will be because of the rising inflation as recent data revealed that the average American bill has risen by more than $200. The US dollar will also react to the latest flash manufacturing and services PMI numbers.

EURUSD

The EURUSD pair is trading at 1.1337, which is slightly above Monday’s low of 1.1320. On the four-hour chart, the pair moved slightly below the 25-day and 50-day moving averages. It is also slightly below the key resistance level at 1.1385 while the DeMarker indicator has moved slightly above the oversold level. Therefore, the pair will likely resume the bearish trend as bears target the next key support at 1.1300.

GBPUSD

The GBPUSD pair was also little changed in the overnight session. It is trading at 1.3600, where it has been in the past few days. This price is slightly below the key resistance level at 1.3645, which it struggled to move above several times last week. It is above the 25-day moving average and is at the same level as the 23.6% Fibonacci retracement point. Therefore, the pair will likely have a bullish breakout today.

XBRUSD

The XBRUSD pair jumped to a high of 93 as geopolitical concerns remained. On the daily chart, the pair retested the lower side of the ascending channel shown in yellow. It also rose above the 25-day moving average while the MACD is above the neutral level. Therefore, the pair will keep rising as geopolitical issues converge with rising demand worries.