CRYPTOCURRENCIES REBOUND AS INVESTORS EMBRACE RISK-ON SENTIMENT

American stocks retreated modestly on Monday as the tensions in Russia rose. The Dow Jones fell by more than 400 points while the S&P 500 fell by more than 20 points. The Nasdaq 100 index turned higher as the market went on. Investors are anticipating that the world economy will see elevated risks going forward as energy prices soar and supply chain problems remain. Therefore, there is a likelihood that central banks will embrace a more hawkish stance even as the risks to global growth remain.

Cryptocurrencies bounced back as investors continued to buy the dips. Bitcoin moved above the $40,000 mark while Ethereum is above $2,800. In the past few days, there have been regulatory talk about these currencies. For example, in Europe, the ECB head has called for regulators to start toughening cryptocurrency regulations considering the ongoing sanctions. On Monday, several cryptocurrency exchanges like Binance announced that they will lock accounts of sanctioned Russians from their platforms.

The economic calendar will have a number of important events today. Earlier, the Reserve Bank of Australia (RBA) delivered its interest rate decision. It left interest rates unchanged and warned that inflation will remain at elevated levels for a while. Markit will publish the latest manufacturing PMI numbers from around the world. Other key economic numbers to watch today will be the latest UK home price index data from Nationwide and Canadian GDP data.

EURUSD

The EURUSD pair tilted upwards in the overnight session. It rose to 1.1220, which was slightly above Monday’s low of 1.1123. The pair has also moved slightly above the 25-day moving average while the Relative Strength Index has tilted upwards. The MACD has also started moving higher. Therefore, the pair will likely continue rising as investors assess the risks posed by an ongoing war.

GBPUSD

The GBPUSD pair has made a strong recovery after falling to the lowest point in three days on Monday. It is trading at 1.3415, which is higher than this week’s low of 1.3312. It has moved slightly above the 61.8% Fibonacci retracement level. It has also moved to the middle line of the Bollinger Bands while the Commodity Channel Index (CCI) has moved upwards. The pair will likely keep rising today.

NZDUSD

The NZDUSD pair rose sharply as investors embraced a risk-off sentiment. It rose to a high of 0.6766, which was the highest level since Thursday last week. The pair managed to move above the 25-day moving average and the 61.8% Fibonacci retracement level. The RSI and the MACD are also pointing upwards. Therefore, there is a likelihood that the pair will keep rising later today.