American stocks declined on Wednesday over concerns about energy and the ongoing crisis in Ukraine. The Dow Jones declined by about 100 points while the Nasdaq 100 fell by 248 points. The main concern is that the crisis will continue despite the positive comments from negotiators on Tuesday. Russia continued shelling cities in the eastern side of the country while experts warned that the country was regrouping. Lululemon was among the best performing stocks after the company published strong quarterly results. Cannabis stocks like Tilray and Aurola also did well as investors watched ongoing legislation in Congress.
The price of crude oil rose in the overnight session on fears of a prolonged crisis in Ukraine. The price also reacted to the latest inventories data from the United States. According to the Energy Information Administration (EIA), the number of inventories declined by over 3.44 million barrels last week. The decline was bigger than the median estimate of 1.022 million barrels. It was also the second straight week that the sector saw a drawdown. Oil prices rose on concerns about shipments from Russia after the country insisted that it will only be paid using rubles.
The Australian dollar was little changed after the latest economic data from Australia and China. The Australian Bureau of Statistics published strong building approvals and housing starts data. As a result, investors are now focusing on the upcoming RBA meeting for clues on when it will start hiking interest rates. Later today, the Office of National Statistics will publish the final reading of UK GDP data. Based on the initial estimates, analysts believe that the economy expanded by 6.5% in Q4. The other important data will be the latest German unemployment rate and the US PCE numbers.
EURUSD
The EURUSD pair moved above the key resistance level at 1.1138, which was the highest level since March 17th. The price is slightly above the 50% Fibonacci retracement level. The bullish view is also being supported by the 25-day moving average while the Relative Strength Index (RSI) has been in an upward trend. Therefore, there is a possibility that it will keep rising today.
USDJPY
The USDJPY pair was little changed on Thursday morning. It is trading at 121.91, which is lower than the year-to-date high of 125.12. It has managed to cross the 25-day MA, signaling that bears are in control. Also, the Relative Strength Index (RSI) has been pointing lower while the pair has formed a bearish flag pattern. Therefore, there is a possibility that it will keep falling as bears target the next key support level at 120.
USDZAR
The USDZAR pair continued its downward momentum as the South African rand strength continued. It fell to the lowest level since August last year. It has declined sharply from its November high of 16.36. It has dropped below the 25-day and 50-day moving averages while the Commodity Channel Index (CCI) has moved to the oversold level. Therefore, the pair will likely keep falling.
