American stocks tumbled on Monday as worries over ongoing tensions between Russia and western countries escalated. In a statement, UK intelligence officials warned that Russia was targeting the Ukrainian capital in a “lightning war”. The statement came two days after the agency said that Russia was planning on installing a pro-Russian government in Ukraine. The UK and the US have ordered their diplomatic staff out of Ukraine while NATO has sent weapons to Ukraine. The Dow Jones index declined by over 900 points while the S&P 500 moved into the correction zone.
The US dollar tilted higher ahead of the upcoming consumer confidence data. The numbers are expected to show that consumer confidence declined from 115.8 in December to 111.8 in January. The decline will likely be because of the omicron variant and rising consumer inflation in the country. The data will come a day after Markit published relatively weak flash manufacturing and services PMI data. The two declined to 55.0 and 50.9 in January, respectively. The next key catalyst for the US dollar will be the latest Fed interest rate decision.
The earning season will continue today and have an impact on American equities. The top companies that will publish their earnings today are American Express, Xerox, Johnson & Johnson, Raytheon. Archer-Daniels-Midland, Lockheed Martin, Invesco, Verizon, and Microsoft. Most of these companies are expected to report strong quarterly results. At the same time, they are also expected to express concerns about wage inflation. Meanwhile, Ford announced that it was stopping new orders for the Maverick truck because it was straining to fill the backlog.
EURUSD
The EURUSD pair declined in the American and Asian sessions as investors rushed to the safety of the US dollar. The pair is trading at 1.1308, which is a few pips above yesterday’s low of 1.1290. On the four-hour chart, the pair has moved below the ascending trendline shown in yellow. It has also moved slightly below the 25-day moving average while the Relative Strength Index (RSI) has been falling. Therefore, the pair will likely keep falling ahead of the US consumer confidence data.
USDCHF
The USDCHF pair tilted higher after weak flash manufacturing and services PMI data. It is trading at 0.9150, which is slightly above last week’s low of 0.9105. On the four-hour chart, the pair is slightly above the middle line of the Bollinger Bands. It has also moved above the 25-day moving average and is slightly below the dots of the parabolic SAR. The pair will likely continue the bullish trend today.
XBRUSD
The XBRUSD pair declined to a low of 84.55 as focus shifted to the Federal Reserve. The pair is trading at 85.15, which is slightly lower than last week’s high of 88.73. On the four-hour chart, the pair moved slightly below the key support level at 85.90. It also moved below the 25-day moving average while the MACD and RSI have also retreated. The pair will continue its bearish trend today as bears target the key support at 83.50.
