Stocks and cryptocurrencies bounce back as sanctions revealed

European stocks bounced back on Friday as investors reflected on the sanctions list offered by Joe Biden. The sanctions will include a limit of exports to Russia. Also, the US announced that the biggest Russian banks and some of the top oligarchs will be sanctioned. Stocks rose because the sanctions did not target Putin himself and the Swift network. They also rose after some positive comments from the Russian foreign minister who said that Russia was ready for talks with Ukraine. 

The euro remained under intense pressure as investors assessed the impact of the current crisis. Analysts expect that Europe will pay a heavier price due to its proximity to Ukraine. Also, the EU, especially Germany, depends heavily on Russian energy and will be impacted as the cost of natural gas rises. In a statement on Friday, the French finance minister warned that the region will do more to pressure Russia and that the EU was prepared to pay the price. Earlier on, data from Germany showed that the economy contracted by 0.3% in the fourth quarter. This translated to a year-on-year growth of 1.8%. In the same period, the French economy grew by 5.4%.

Gold and crude oil prices retreated while cryptocurrencies bounced back as investors reacted to the ongoing situation in Europe. Gold has been in a strong bullish trend in the past few days as investors rushed to its safety. It rose to the highest level since 2020. Meanwhile, the price of crude oil dropped below $100 a barrel as the US left the commodity out of its sanctions list. Bitcoin and other cryptocurrencies, on the other hand, have risen by double-digits in the past 24 hours.

EURUSD

The EURUSD pair is trading at 1.1186, which is slightly below the intraday high of 1.1228. On the four-hour chart, the pair remains slightly below the 25-day moving average and is between the middle and lower lines of the Bollinger Bands. It has moved slightly above Thursday’s low of 1.1115 while the MACD has moved below the neutral level. Therefore, the pair will likely remain in this range as investors focus on the crisis in Ukraine.

XBRUSD

The XBRUSD pair retreated today as investors assessed the impact of the sanctions levied against Russia. The pair is trading at 95.17, which is lower than this week's high of over 101. On the daily chart, it moved slightly below the upper side of the ascending channel. It remains above the 25-day moving average while the Commodity Channel Index is slightly above the overbought level. Therefore, the pair will likely resume the bullish trend in the near term.

XAUUSD

The XAUUSD pair retreated as investors took profit. It is trading at 1,904, which is lower than this week’s high of 1,973. On the four-hour chart, the pair remained slightly below the 25-day moving average and above the key support level at 1,877. The Relative Strength Index has moved slightly below the overbought level. Therefore, the pair will likely resume the bullish trend during the American session.