General Comment

It has been a month since the start of the war in Ukraine and at the moment no solution is visible through diplomacy. Ukrainian cities continue to be besieged by the Russian army, and recriminations between Russia and the West continue unabated. The use of nuclear weapons has also come to the fore from Russian lips, something that, according to the West, will not go unanswered. Strict warnings have also been issued to China about its involvement in the war, aiding Russia. In the last few hours, however, there is a strong diplomatic background, a new round of negotiations is rumored and some statements by the Ukrainian president open a window of optimism.

Beyond geopolitical events, we are in a transitional period as far as central banks are concerned. High inflationary pressures in the world’s largest economies create the need for tighter monetary policy and higher interest rates. The United States and the United Kingdom have already begun raising interest rates, and the European Central Bank is expected to do the same by the end of the year. These increases must be made with care so as not to hurt growth and other macroeconomic variables, which is extremely dangerous due to the energy crisis caused by the war in Ukraine.

US stock indexes continued their uptrend for the second week in a row. In Europe, on the other hand, the corresponding indicators fell slightly, except for the United Kingdom. The dollar moved higher and most of the other major currencies fell, based on the negative investment sentiment of the markets. Gold and oil had profits amid worries and fears, while Bitcoin and most cryptocurrencies also rose. Finally, it is worth noting the explosive rising in bond yields with the US 10-year starting the week at 2.15% and closing it at 2.49%. The last time we saw such yields on bonds was in the spring of 2019.

Given the continuation of the war in Ukraine this week, volatility is expected to increase further because there is a strong and rich economic calendar. More specifically, announcements of new jobs in the United States (NFPs), inflation in the euro area and Germany, the unemployment rate in the eurozone area, and GDP in the United States and the United Kingdom are expected.


The US SP500 index closed higher last week, at 4,535 points and profits of 1.60%. The index strengthened for the second week in a row, although the climate is not so positive as there does not seem to be a strong possibility of a diplomatic solution to the war in Ukraine at the moment. Bond yields, which are usually negatively correlated with stock markets, also rose sharply. Also, a negative factor for SP500, is market expectations for a rate hike by the Fed in May, with the CME FedWatch tool now giving a 71% chance of a 0.50% increase and a 29% chance of a 0.25% increase. Therefore, the rise of the index from Thursday onwards should be attributed to the positive impact of the financial announcements and especially the PMI indices and to the cultivated expectations that the USA will contribute to the solution of the energy problem with new sales, mainly to Europe.  Of course, the big issue of the war is expected to dominate again and is capable of causing strong corrections but if the index endures and shows an increase in such unfavorable conditions then in case a diplomatic solution is seen, it is possible to have strong profits. We may try long positions this week.



The German DAX40 index moved lower last week, closing at 14,400 points, with losses exceeding 0.50%. Given the negative climate created by the war and the energy dependence of Europe and Germany on Russia, the index could not continue its profitability for the third week in a row. Germany’s PMI for March, however, was above market expectations but the business climate fell sharply. A continuation of the rise will have a higher chance of over 14,600 points, which is a high price for over a month, while if the index corrects, the closer it is to 14,000 points, the lower the scenario will gain points. Long positions is our selection for the current week.



The British FTSE100 index moved higher last week, closing at 7,465 points with profits approaching 1%. The British stock market is outperforming the European ones, obviously because the United Kingdom, has less energy dependence on Russia and is, therefore, less affected by the war. The macroeconomic news of the country was not such as to favor the stock indices, with inflation being announced at a very high price and retail sales disappointing, however, it seems that a climate of optimism is cultivating in many investors and so the index had a significant rise for a third week in a row. There is now an approach of very significant resistance and the high price of many years, over 7,630 points, and some analysts believe that it is a matter of time to see such levels. But as long as the war continues and there are fears of its expansion, corrections remain on the table as the dominant scenario. By trusting more in the first case, we may try long positions this week.



Last week was bullish for gold, closing at $ 1,963 and profiting 2.20%. The fears and worries caused by the war combined with high global inflation and reports of an energy and food crisis are creating a positive climate for gold. Gold strengthened even though its main competitors (bond yields and Bitcoin/cryptocurrencies) also strengthened. Important news is the decision of the G7, to ban the central bank of Russia from trading in gold. We remind you that the Russian reserves do not exceed 130 billion dollars and that on 28/2, Russia announced the resumption of the purchase of gold in the domestic metal market. Based on some scenarios that dominate the last hours for a diplomatic solution in Ukraine, prices fall below $ 1,950 and if there is a downward break below $ 1,942, we may see further de-escalation so we may try short positions this week.


US Oil

Last week was strongly bullish for oil with next month’s futures closing at $ 112.54 and profits exceeding 8.50%. The main issue that certainly affects the price of oil is the war in Ukraine, the fears and worries it raises, but also any hopes for its termination. Last week the climate was generally negative and worsened following Russian statements to sell energy in rubles only and to possibly cut off oil supplies for two months because the main pipeline needed to be repaired. Some hopes for increased production through Iran have been dashed as US National Security Adviser Jake Sullivan said there has been significant progress in the nuclear talks but many issues remain. Earlier this week there was a de-escalation to $ 110, apparently due to optimism for a diplomatic solution in Ukraine and if there is a break of support at $ 108.60 and $ 107, we may see the correction scenario strongly in the foreground. We may try short positions this week.

EURUSD (Euro vs US Dollar)
The EURUSD was bearish last week, opening at 1.1056 and closing at 1.0984. The US dollar continues to strengthen as it is considered a safer investment option in times of crisis and war. In contrast, the euro, which is considered a higher risk option, does not attract the majority of investors. The loss of the milestone price of 1.10, indicates this situation. Last week’s financial calendar was poor in Europe and the United States. PMIs were released in the Eurozone, Germany and the US above expectations and this creates rays of optimism. Orders for durable goods in the US, however, were announced much lower than expected, affecting the dollar to some extent. Given the very important announcements of inflation in the eurozone and new jobs in the US (NFPs), this week is more important than the previous one in terms of economic announcements. If the picture in Ukraine continues and the dollar continues to strengthen, we may see a further fall in the pair with all eyes on the significant support of the price range of 1.08. We may try sell positions this week.


GBPUSD (Great Britain Pound – US Dollar)

Stabilizing trends prevailed last week for the GBPUSD, which opened and closed near 1.3180. The trend of the pair was bullish in the first half of the week and bearish in the days that followed. The strength of the US dollar certainly affected the GBPUSD, which was unable to continue the uptrend it had performed the week before. Inflation in the United Kingdom in February was announced at 6.2%, significantly higher than 5.5% in January. This announcement should normally have strengthened the pound sterling as it increases the need for tighter monetary policy and interest rate hikes but the British currency has weakened. This weakening continued in the following days after the announcement of retail sales on Friday in negative territory compared to the previous month, putting even more pressure on the pound. If the situation in Ukraine continues and the dollar strengthens further, there may be an approach of 1.30 again. But if markets see high inflation in the UK as a precursor to higher interest rate hikes, then we may see the pair strengthen to 1.33. We prefer sell positions this week.


USDJPY (US DollarJapanese Yen)

The USDJPY, which opened at 119.05 and closed at 122.09, moved strongly upwards last week. The pair has been on a strong uptrend for three weeks now as the US dollar strengthens, bond yields have exploded and the yen continues to weaken. Inflation in March was announced in Japan at 1.3%, above the 1% of the previous month but below the 1.5% expected by the markets. So, all indications are that the Bank of Japan will continue its loose monetary policy and negative interest rates in pursuit of a weak yen. The Japanese currency, which is a safe investment option in times of crisis, is not strengthened by these options. The next resistance is in the price range of 123.85 but corrections cannot be ruled out because supermarkets have already been created for the pair. We may try buy positions for one more week.


EURJPY (EuroJapanese Yen)
Last week was significantly bullish for the EURJPY, which opened at 131.65 and closed at 134.08. Europe is tightening its monetary policy and raising expectations for higher interest rates over the year, in contrast to Japan, which is likely to continue as it is. In addition, rising European bond yields (10-year German opened at 0.37% and closed at 0.59%), which are strongly correlated with the pair, help its uptrend. The pair is exactly on the very important resistance at 134.10 and if it moves significantly above it, it will be at the levels of the beginning of 2018. While everything shows that we are on a strong uptrend, oversupplied levels may give rise to corrective trends but we prefer buy positions for one more week, trusting in the strong uptrend.


EURGBP (Euro – Great Britain Pound)

Last week was bearish for the EURGBP which opened at 0.8386 and closed at 0.8332. The sterling after the recent rise in interest rates by the Bank of England, appears stronger than the euro, maintaining the downtrend of the pair that has begun since the end of 2020. This week with the announcements of inflation in the eurozone and the GDP in the United Kingdom, the markets will try to get more information about the intentions of the central banks. If the situation does not change significantly, we will see a further downtrend, bearing in mind the support at 0.82, which if broken will lead the EURGBP to prices that we have to see from the summer of 2016. Sell positions is our selection for the current week.


USDCAD (US Dollar – Canadian Dollar)

Last week was sharply bearish for the USDCAD, which opened at 1.2598 and 1.2475. It is worth noting that we had nine consecutive falling weeks without any upward reaction. The sharp rise in oil prices is a key factor in this decline because it usually favors the Canadian dollar. The recent rise in interest rates by the Bank of Canada offsets the corresponding increase of the Fed and in fact, many analysts expect new interest rate hikes in Canada in 2022 and 2023. Also, the macroeconomic picture of the country is good and this gives extra credits to its currency. The week that started is important since, in addition to the NFPs in the US, the Canadian GDP is also announced. The support at 1.2450 is quite significant and if there is a de-escalation of oil prices, we can see bullish reactions. Below 1.2450, however, a strong downward movement begins. We may try buy positions this week.


USDCHF (US DollarSwiss Franc)
The USDCHF had a slight downtrend last week, as the opening was at 0.9321 and the closing at 0.9305. There is a normal preference for the Swiss currency as a safe-haven asset for investment in times of crisis but not to the extent that it will help to develop a strong downtrend in the pair. The Swiss central bank left unchanged interest rates to -0.75% and is now in stark contrast to the policies of other central banks, but Switzerland is not facing such a severe problem with inflationary pressures. Given the difference between the US and Switzerland in interest rate policy and if the climate in Ukraine improves, we can see upward reactions, even close to 0.95 so buy positions is what we’ll may open this week.


AUDUSD (Australian Dollar – US Dollar)

Last week was strongly bullish for the AUDUSD which opened at 0.7405 and closed at 0.7515. Since the beginning of the year and the price range of 0.70, there has been a strong uptrend for the AUDUSD which seems to ignore the concerns about the war in Ukraine, even the negative picture of the PMI indicators announced last Thursday in Australia. The rise in commodity prices, however, is a favorable factor for the Australian dollar, while the country’s bonds have risen to multi-year highs. Australia’s 10-year bond is approaching 3% and we have been seeing this since the spring of 2018. However, the strongly overbought condition of the pair, combined with the continuation of the war, is likely to bring corrections, even if it is a short-term reaction so we may try sell positions this week.



Last week Bitcoin had a strong uptrend as it closed at $ 46,864 with profits exceeding 13%. Bitcoin has shown resilience in the face of the negative investing sentiment in the markets due to the war and has not been adversely affected by the recent Fed rate hike. The information that BlackRock intends to adopt Bitcoin and that the Luna Foundation Guard (an open-source technology non-profit organization) bought $ 125 million worth of Bitcoin strengthens the institutional role of cryptocurrencies and raises their credibility. Bitcoin seems to be recovering and if it can stabilize above $ 46,000, it has a good chance of further growth so we may try long positions this week.



The information of this report is of a general nature only. It is not a personal financial advice. It does not take into account your objectives, financial situation and personal needs.

a-Quant is not responsible for your actions and recommends you contact a licensed financial advisor before acting on any information contained in this general information report.

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