US DOLLAR INDEX PRICE ANALYSIS: FURTHER UPSIDE TARGETS THE 96.90 AREA

14 February 2022, 14:18

• DXY climbs to fresh tops further north of the 96.00 hurdle.
• The next target of note comes around 96.90.

DXY posts gains for the third straight session on Monday, extending the recent surpass of the 96.00 barrier.

If the recovery gains more serious traction, then the index is expected to revisit the 96.90 region, where the November and December 2021 highs are located. The surpass of this level should expose a move to the 2022 peak around 97.40 (January 28).

In the near term, the 5-month line near 95.20 is expected to hold the downside for the time being. Looking at the broader picture, the longer-term positive stance in the dollar remains unchanged above the 200-day SMA at 93.62.

DXY daily chart

S&P 500 FALLS ALMOST 2% BELOW 4420 ON REPORTS OF RUSSIA'S INVADING UKRAINE AS REPORTED BY US PRESS

11 February 2022, 23:49

• The S&P 500, the Dow Jones, and the Nasdaq Composite fell between 1.43% and 3.07%.
• Ukraine/Russia conflict escalation points towards a Russia’n invasion as reported by US press, confirmed by the US Security Advisor.
• Market sentiment was dismal, as safe-haven flows like gold, the USD, and the yen dominated the end of the week.
• Western Texas Intermediate finished the week above $93.10 per barrel as geopolitical tensions arose.

On Friday, US equities dropped sharply as recent geopolitical chatter linked to the Ukraine – Russia conflict. US news sources said that a Russian invasion of Ukraine was imminent, spurred a flight to safe-haven assets. 

As the New York session ends, the S&P 500 drops 2.05%, at 4,410.85. The Dow Jones Industrial falls some 1.45%, at 34,729.63, and the tech-heavy Nasdaq Composite slides 3.17%, sits at 14.230.95.

Sector-wise, energy (boosted by rising oil prices) and utilities advance 2.79% and 0.01% each, while the biggest losers are technology, consumer discretionary, and communications, sliding 3.01%, 2.82%, and 2.54%, respectively.

US press wires report that Russia decided to invade Ukraine

Around 18:30 GMT, according to a PBS NewsHour reporter, “the US believes that Russian President Vladimir Putin has decided to invade Ukraine and already communicated those plans to the Russian military. Two Biden administration officials said they expect the invasion to begin as soon as next week.”

The reporter continued “that US defense officials anticipate a “horrific, bloody campaign” that begins with two days of bombardment and electronic warfare, followed by an invasion, with the possible goal of regime change. Reportedly, the North Atlantic Council was briefed on the new intel today.”

The US National Security Advisor confirms the rumors

Later in the day, rumors were confirmed by National Security Advisor Jake Sullivan. He said, “we are in the window where a Russian invasion of Ukraine could begin at any time and could happen during the Beijing winter Olympics.” Furthermore, he added that “the US continues to see signs of escalation at the border, and would respond decisively should Russia invade.”

Jake Sullivan urged all Americans in Ukraine to leave “as soon as feasible.” Moreover, Sullivan said, “we are not saying Putin has made a final decision, but Russia now has all forces it needs to conduct a major military action, but he did clarify a false flag operation is also possible by Russia.”

As Wall Street closed, it crossed the wires the news that the US President Joe Biden and Russia’s Vladimir Putin would talk over the phone on Saturday,  per Via citing the Kremlin.

Putting the geopolitical jitters aside, the greenback got bid, with the US Dollar Index, advancing close to 0.50%, reclaiming 96.05, linked to safe-haven flows. US Treasury yields fell in the bond market, led by the 10-year yield down eleven basis points, below 2% at 1.916%, a tailwind for precious metals.

At the same time, gold rises 2% exchanges hands at $1864.44 a troy ounce, while US crude oil benchmark, WTI, hit $93.10 per barrel amid revived Ukraine invasion concerns going into the weekend.

In the FX Market, the EUR/USD got hammered by the crisis, trading at 1.1345, while the GBP/USD barely unchanged at 1.3550 got a boost from higher UK’s GDP numbers. Concerning safe-haven pairs, the USD/JPY failed to cling to the 116.00 figure influenced by safe-haven flows, trades at 115.31, while the USD/CHF finished at 0.9243.

S&P 500 OPENS SHARPLY LOWER AFTER HOT US INFLATION DATA

10 February 2022, 16:39

Wall Street's main indexes came under strong bearish pressure on Thursday after the data from the US showed that inflation continued to rise at the beginning of the year.

The S&P 500 Index was last seen losing 1.15% at 4,535, the Dow Jones Industrial Average was losing 0.75% at 35,500 and the Nasdaq Composite was falling 1.4% at 14,285.

The US Bureau of Labor Statistics reported that inflation, as measured by the Consumer Price Index (CPI), jumped to 7.5% on a yearly basis in January from 7% in December. This reading surpassed the market expectation of 7.3%. Additionally, the Core CPI, which strips food and energy prices, climbed to 6% from 5.5%, compared to analysts' estimate of 5.9%.

Meanwhile, the benchmark 10-year US Treasury bond yield is up nearly 3% on the day at 2% and the CME Group FedWatch Tool shows that markets are pricing a 50.2% probability of a 50 basis points Fed rate hike in March.

S&P 500 INDEX: 4625 TO TRY AND CAP FOR A FALL BACK TO RETEST SUPPORT AT 4453/50 – CREDIT SUISSE

10 February 2022, 15:55

The S&P 500 has recovered strongly for a break above its downtrend from early January to retest of its early February high and 61.8% retracement of the January sell-off at 4591/95. We see scope for a move above the early February high and 61.8% retracement of the January sell-off at 4591/95 to test the 63-day moving average (DMA) at 4625, but with a fresh cap looked for here. 

Close below 4453/50 to mark a more important turn lower again

“With daily MACD momentum having turned higher, there is a risk for a break above the early February high and 61.8% retracement of the January sell-off for a deeper recovery yet to test the falling 63-DMA, currently placed at 4625.”

“Our bias remains for the 4625 level to prove a major barrier and for the broader risk to then turn lower again in line with our broader ranging view.”

“We note though the continued similarities between now and 2018 and if we were to continue to repeat this path this suggests a move to the 78.6% retracement of the January collapse at 4691 cannot be ruled out.”

“Support is seen at 4548/47 initially, then the lower end of the price gap from yesterday morning at 4522. A close back below here can ease the immediate upside bias for a fall back the key price pivot and 20-DMA at 4453/50. A close below here is needed to mark a more important turn lower again.”

 

Equity Strategists, Portfolio Managers Share Bitcoin Price Predictions: Survey

Equity strategists and portfolio managers were asked about what the price of bitcoin will be by the year-end. Almost half of the surveyed participants say the price of the cryptocurrency will fall below the $30K level but some believe it will rise to $60K.

Year-End Bitcoin Price Expectations by Equity Strategists and Portfolio Managers

Equity strategists and portfolio managers revealed what they think bitcoin’s price will be at the end of 2021 in a survey by CNBC, published last week. Every quarter, the media outlet polls about 100 chief investment officers, equity strategists, and portfolio managers about their views on the markets for the rest of the year. The latest survey was conducted from June 23-30.

According to the survey results unveiled last week, 44% of respondents said the price of bitcoin will be below $30,000 by the end of the year.

In addition, 25% of equity strategists and portfolio managers said it will be $40,000 and another 25% said it will reach $50,000. Only 6% expected the BTC price to hit $60,000 by the year-end.

Equity strategists and portfolio managers Survey’s results. Source: CNBC

Several surveys recently conducted indicate the growing popularity of cryptocurrency investments among institutional investors. The 2021 Trends in Investing Survey, conducted by the Journal of Financial Planning and the Financial Planning Association (FPA), found that more than 26% of financial advisors plan to increase their recommendation of cryptocurrencies over the next 12 months. Meanwhile, 49% of the advisors said that clients have asked them about investing in cryptocurrencies in the last six months.

The latest Bank of America’s Global Fund Manager Survey showed that “long bitcoin” is the second most crowded trade for fund managers. Moreover, a global poll of chief financial officers indicated that hedge funds are likely to significantly increase their cryptocurrency holdings.

Where do you think the price of bitcoin will be by the year-end? Let us know in the comments section below.

US consumer inflation highest since 2008, as initial jobless claims hit pandemic low – as it happened