The markers were all over the place today as the Russian/Ukraine conflict continued to keep the market in motion

  • Crude oil soared in trading today. The price is up nearly $10 in after hours trading (and up 10.8% on the day). The move higher comes despite the IEA releasing 60M barrels. That amount was rumored yesterday to be 70M. At the end of the day, the amount is a drop in the bucket compared to the global daily usage (the US alone consumes 18.19 million barrels of petroleum per day. Tomorrow, OPEC is meeting and they are expected to continue the increase in production of 400K plan. Crude oil is currently trading at $106.35 up $10.63 or 10.6% on the day.
  • Commodities surged with the price of wheat and corn futures both reaching their daily limit. Soybeans were also sharply higher. The price of wheat futures are trading up the daily limit of $0.50 to $9.84 (or 984 cents). The price of corn is up it's daily limit of $0.35 to $7.25 (or 725 cents). The price of wheat is up 5.35% while the price of corn is up 5.07%.. Soybeans are also up with the contract trading up by 3.25%. Russia and Ukraine are large exporters of soft commodities like Wheat and Corn. The conflict/war in Ukraine is threatening the supply.

In the US debt market, yields continued their tumble with the 5 year moving down by -12.3 basis points leading the way. The fall was pushed by flight to safety flows mainly, but it could be some expectations that slower growth is ahead as well with inflation soaring and the Fed still likely to hike. There are a lot of balls in the air fundamentally in the US debt market. The storyline can change quickly.

US yields
US yields moved lower

European yields also moved lower with UK 10 year tumbling by -30 basis points on the day. Although other country yields were also lower, they did not compare to that move.

Europe
European benchmark 10 year yields

IN the US stock market, the traders chose the path of least resistance, and that was to the downside. The Dow, S&P and the Nasdaq closed down by at least -1.55% (the Dow fell -1.76%). European shares did not fare as well as most of the indices were lower by -3.4% or more (the UK FTSE 100 was ONLY down -1.72%).

Below are the highs, lows, changes and closes for the major US and European indices today.

Stocks

Finally in the Forex, the JPY and the USD are ending the session as the strongest while the EUR is the weakest.

Looking at some of the major currencies and the technicals going into the new trading day:

  • The EURUSD traded to a new 2022 low today at 1.10889. That took out the the previous low from last week at 1.1106 which took out the Jan 28 low at 1.11207. The price momentum on the break could not be sustained, much like the low from last week could not either, and the pair closed at 1.1121 area. The failed break will have some traders leaning against the last Thursday low at 1.1106 as a close support level. If that level can hold, a move back toward the falling 100 hour MA at 1.1202 becomes a target. Be aware that the last three days has seen the 100 hour MA stall the rallies. So if the price DOES go higher, look for sellers to lean against that MA on a test. Conversely, break below 1.1106 and don't get in the way of more downside probing in the EURUSD.
  • GBPUSD: The GBPUSD fell below a swing area between 1.3357 to 1.3373 and continued falling until it broke below the low from Monday at 1.33157 and reached 1.3301. That low (and natural support level stalled the fall and the price rotated modestly higher into the close to 1.3323. The low today also stayed above the cycle low from last week at 1.3272. In the new day, a move back below the low from yesterday at 1.3315 and then the 1.3300 level would have traders gunning for the 1.3272 level. However, if those levels can hold, getting back above 1.33739 would have traders thinking about the falling 100 hour MA at 1.3404. Today the Asian session high stalled at the 100 hour MA. As a result, traders may look to do the same on a rally in the new day (with stops on a break above).
  • USDJPY: The USDJPY followed rate and stocks lower but spent most of the NY session consolidating between 114.68 and 114.94. Those levels will be break points in the new day. Move above 114.94 and the 200 and 100 hour MAs at 115.08 and 115.18 become targets. Move below 114.68 and a move toward the lows from last week at 114.49 and 114.40 become targets. The 100 day MA will also be in play at 114.42.
  • USDCAD: The USDCAD traded to a low of 1.2649 to 1.2656. That was support going back to January 26th. The run back to the upside stalled right near the 100/200 hour MAs between 1.2739 and 1.27489. The price stalled there and closed near 1.2739. The BOC is expected to raise rates by 25 basis points at 10 AM ET tomorrow. As a result, the pair may be happy hanging around the MAs ahead of that decision. On a move above, traders will be watching the 1.27856 area as resistance> That is the high where most of the trading has been been taken place since January 26. A move above would be more bullish. On the downside, move below 1.2694 and the 100 day MA at 1.26385, and I would expect selling to intensify.

In addition to the Russia Ukraine risk and the Bank of Canada risk, Fed Chair Powell will testify in the Senate tomorrow at 10 AM ET. Is he thinking 50 or 25 basis points is what traders will be focused on.