The first week of a new month brings with it a large amount of data to absorb with manufacturing PMIs, unemployment figures and central bank interest rate decisions from Europe. The ECB meeting is being built up s one of the major risk events of the week as no action could see the euro build on the already unexpected strength it’s established in the past few months although the 1.3800 level remains a significant hurdle that looks to have formed a triple top. The week climaxes with its usual nonfarm payroll figure from the US which once again will be closely watched to see if the recent weakness in economic data from across the pond is just a weather phenomenon or something more structural.
This morning however is a different kettle of fish as geopolitical tensions over Ukraine between Russia and the West mount and safe haven assets have been seeing a great deal of interest overnight. The Yen has pushed the dollar to a new three week low not far off the 101.00 level and is not too far off its 200 day moving average which is seen around 100.50. Gold has also benefitted from the uncertainty hitting 1348, a new four month high, so any bulls with a renewed sense of optimism towards the precious metal could have the 1360 in their sights. Geopolitical concerns have a habit of distorting the markets and in this case they could continue to do so for as long as the Ukraine issue remains in the headlines.
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