Against the backdrop of military confrontation in Ukraine, the US dollar spiked higher in yesterday's trading on the back of its safe haven currency status vis-à-vis other risk currencies. However, at the beginning of the North American trading session, the greenback showed signs of overbuying as a correction to the downside broke out. This correction was seen across all markets: US equities turned around, whereas oil, gold, and silver pared gains after a knee-jerk increase.
The second estimate of US Q4 GDP, released yesterday, exceeded the median consensus, up 7.0% in annual terms, and had little impact on the market.
As shown in the chart below, the EURUSD currency pair yesterday managed to narrowly break through the key 1.1121support level, retracing to lows since May 2020, but quickly rebounded. If this level is breached again, we would advise FX market participants to sell the pair with a downside target of 1.0870.
Upcoming macro releases (GMT+3)
Tuesday, March 1