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What's new?

The EUR attempts a rebound today after J.Biden met with European leaders. EU countries are now developing strategies to counter dependence on Russian oil and cool down skyrocketing commodities prices. China is within line of sight of the US regarding the efforts made to keep the Russian economy afloat.

The main risk from the conflict is Putin's threats in the use of chemicals weapon as a sign of anger in its inability to win the war in Ukraine. "The nature of the response depends on the nature of the use," said Biden.

On the market side, FED Bank of Chicago President Charle Evans said he is open-minded about changing the USD key interest hiking pace although such a move will question the FED forward guidance. Investors are for now pricing 6 hikes until the end of the year. The expected FED interest rate at December 2022 is 2.20% (based on the FED fund's future contract).

The AUD hit today an important horizontal resistance, last tested in November 2021 @ 0.7531 a major breakup would bring Aussie higher while he could also reverse the AUD trend…On the macro side, the bullish AUD sentiment seems still to be driven by high commodities prices but worsening sentiment with China (Covid outbreak and complacency with Russia might abord the bullish trend.

What’s in the pipe?

German IFO Business Climate - 4pm HKT

FX rates

USD/JPY @ 121.80 - Very bullish trend
EUR/USD @ 1.1027 - Bearish trend - major horizontal resistance : 1.1141
GBP/USD @ 1.3194 - Bearish trend - major support / resistance : 1.3209, Major resistance : 1.3322

AUD/USD @ 0.7506 - Upwards breach of range trading and horizontal resistance (0.7531) has been today - bullish trend if the AUD keep trading above 0.7465

USD/CNH @ 6.3772 - Upwards breach of the bearish trend - major support : 6.3624

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