Fed Bets and Geopolitical Tensions Are Back in the Spotlight

BULLARD’S HAWKISH REMARKS AND GEOPOLITICAL RISKS WEIGH ON RISKY ASSETS

The US dollar traded higher against all but two of the other major currencies on Monday and during the Asian session Tuesday. It lost ground only versus CHF and JPY, while it gained the most against EUR, AUD, and NZD.

DAX — TECHNICAL OUTLOOK

The German DAX cash index traded lower on Monday, but hit support at 14843, a support marked by the low of January 24th, and then, it rebounded to hit resistance near the 15135 level. Overall, the index remains below the upside support line taken from the low of January 24th, and thus, we would see chances for another round of selling soon.

AUD/USD — TECHNICAL OUTLOOK

AUD/USD saw similar trading activity, due to its sensitivity to the broader market sentiment. It slid, hit support at 0.7085, and then, it rebounded to find resistance at 0.7140. However, it stayed below the prior upside support line drawn from the low of January 28th, and thus, we would consider the short-term outlook to still be cautiously bearish.

AS FOR THE REST OF TODAY’S EVENTS

From Germany, we have the ZEW survey for February. The current conditions index is expected to have risen to -7.0 from -10.2, while the economic sentiment one is forecast to have inched up to 53.5 from 51.7. As for the Eurozone as a whole, we get the second estimate of GDP and the employment change for Q4. The second GDP estimate is expected to confirm its preliminary print, while no forecast is available for the employment change.

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