EUR/usd
Escalation of the Ukrainian crisis has put severe pressure on the Asian exchanges today. Investors are looking for safe assets, trying to minimize risks of the expanding conflict in the Crimea. The question about safety of this or that asset is really acute now. Let's dwell on this today. In Forex the yen and franc are in primary demand. Besides, gold and oil are purchased quite well. The US stock futures have come off their historic highs. This movement isn't large-scale, but this reflex impulse looks very revealing. The market sentiment about the EU currencies has changed. The euro and pound opened the week with a gap down, but quickly recovered to the levels of the last week's end. On Friday the euro/dollar went above 1.38. Before that the pair had traded there for a little while in late December and in late October. So, with hitting this level we return to the question whether it will hold out and whether the dollar will continue declining. The US economy has been skidding a bit lately. Friday's employment report will show us how serious it is. And before that the market will be completely in the dark, trying to stay within the traded levels. The inflation report published last Friday proved to be favourable for the euro. The inflation remained unchanged, avoiding slowdown, which makes the need in economic incentives from the ECB less urgent.
GBP/USD
The British pound has been supported by the strong PMI today. Though this index formally met the expectations, its rate of 56.9 reflects an impressive pace of growth in the real sectors. For over half a year this indicator has been stabilizing at high levels. Yet, it is hard to believe that it will be enough for the pound to reach a new level – above 1.70. As has been frequently mentioned, since 2009 the sterling has continually reversed at these levels, as the economic growth bogged down, failing to live through appreciation of the British currency.
USD/JPY
At the beginning of the day the Japanese yen appreciated against most of the currencies, including the dollar, and later in the day it continued growing as investors were fleeing from risky assets and searching for a safe haven. Strategically, the yen should be getting weaker due to the extremely soft monetary policy of the BOJ, but the geopolitics and capital repatriation at the end of the financial year in the country contribute to demand for the Japanese currency. In short term bears might have the insolence to test the 200-day MA (100.10).
Oil
Oil shot up on the news from Russia. Last week's consolidation ended with a confident jerk by 2.5usd up. The US WTI rose to 104.50, which hasn't been seen since last September. Not only unpredictability of the geopolitics, but even the technical analysis don't give a chance to hope for decline from these levels in the near future. It is quite possible that the price will consolidate only above 108-110.
