EUROPEAN AND AMERICAN STOCKS RETREAT AS UKRAINIAN TENSIONS RISE

European stocks and American futures retreated on Friday as the crisis in Ukraine continued. Negotiators between Ukraine and Russia have not made any substantial progress in the past few days. In a call with the German Chancellor, Putin blamed Ukrainian negotiators for dragging the talks by putting forward unrealistic proposals. Ukraine argues that Russia is not sincere in its negotiations considering that its troops have been bombing Ukrainian cities. The stocks also declined ahead of a call between Biden and Xi Jinping of China. Ahead of the call, China sent its aircraft carrier through the Taiwan strait.

The price of crude oil held steady for the second straight day as investors watched the developments in Ukraine. The longer the crisis drags the more the supply situation will worsen. In a report published on Thursday, the International Energy Agency (IEA) said that the world will see the biggest supply squeeze in decades in the coming month. It estimates that Russia will cut its production by over 3 million barrels in April if sanctions remain. While the oil and gas sector has not been sanctioned, many traders and large players in the industry will avoid dealing with Russia.

The Japanese yen declined to the lowest level in years after the dovish interest rate decision by the Bank of Japan. The bank decided to leave interest rates unchanged at -0.10%, where they have been for the past few years. It also decided to continue with its quantitative easing program. This decision went contrary to what other central banks have done. This week, the Federal Reserve and the Bank of England decided to hike interest rates. The ECB has also hinted that it will hike in the coming months. Instead, the BOJ statement warned that it could ease policy if the Covid pandemic continues.

USDJPY

The USDJPY pair continued its strong rally on Friday after the BOJ decision. On the daily chart, it has moved above the 25-day and 50-day moving averages. It has also risen above the Ichimoku cloud while oscillators like the Relative Strength Index (RSI) and the MACD have continued rising. Therefore, there is a likelihood that the pair will keep rising in the coming days as the Fed and BOJ divergence continues.

EURUSD

The EURUSD pair retreated on Friday as risks rose. It dropped to a low of 1.1035, which was the lowest level since March 17. On the four-hour chart, it has retested the upper side of the triangle pattern. This could be part of a break and retest pattern. It remains above the 25-day and 50-day moving averages while the Relative Strength Index has also pointed lower. Therefore, there is a likelihood that the pair will resume the bullish trend because of the break and retest pattern,

EURJPY

The EURJPY pair continued its bullish trend after the BOJ decision. It rose to a high of 131.60, which was the highest level since February 21. On the four-hour chart, the pair moved above the short and medium-term moving averages. It has also formed a V-shaped recovery pattern and moved above the 78.6% retracement level. Therefore, the pair will likely keep rising during the American session.