EUROPEAN EQUITIES MUTED AS CRISIS IN UKRAINE ESCALATES

The New Zealand dollar retreated slightly on Monday even after the strong trade numbers from the country. According to the statistics agency, imports declined from NZ$5.92 billion to NZ$5.88 billion. At the same time, exports jumped to NZ$5.49 billion. As a result, the country’s trade deficit narrowed to about NZ$385 million. These numbers mean that the RBNZ will likely hike interest rates in the upcoming monetary policy meeting. It has already made three rate hikes in the past few months.

European stocks declined slightly after they staged their best week since 2020. The rally was fuelled by the rising optimism of a peace deal between Russia and Ukraine. These talks fizzled out as Russia has continued shelling some Ukrainian cities leading to millions of refugees. Ukraine rejected an offer by Russia to surrender Mariupol. Focus now shifts to the upcoming NATO meetings in Europe, which Joe Biden will attend. The DAX and CAC 40 indices were little changed.

The economic calendar had no major events today. Therefore, investors continued to focus on key developments in Ukraine and company news. Boeing shares declined in the premarket after a 737 plane crashed in China with 132 people onboard. Meanwhile, Nielson rejected an acquisition bid from a group of private equity companies saying that the deal was undervaluing the company. Meanwhile, Warren Buffett announced that he will acquire Alleghany in a $11 billion deal. Across assets, the price of crude oil and gold held steady as the crisis in Ukraine escalated.

NZDUSD

The NZDUSD pair retreated slightly after the latest New Zealand trade numbers. It moved to a low of 0.6878, which was lower than last week’s high of 0.6924. On the four-hour chart, the pair has formed a double-top pattern and is slightly above the 25-day and 50-day moving averages. The MACD has formed a bearish crossover pattern. Therefore, the pair will likely keep falling in the near term as bears target the next support at 0.6800.

EURUSD

The EURUSD pair was little changed on Monday as investors watched the ongoings in Ukraine and the recent decisions by the Fed and ECB. It dropped to 1.1030, which was slightly below last week’s high of 1.11338. It is trading at the same point as the 25-day and 50-day moving averages and is between the 23.6% and 38.2% Fibonacci retracement level. The pair will likely continue dropping during the American session.

USDCHF

The USDCHF pair declined to a low of 0.9300, which was the lowest it has been in weeks. It has moved to the lower side of the Bollinger Bands. Also, it has dropped below the 25-day moving average while the Relative Strength Index and the MACD have been in a bearish trend. Therefore, the pair will likely continue falling as bears target the next key support at 0.9250.