The S&P 500 index has pierced the weekly lows (24 Jan 4,222.62), printing a low of 4,221.51.
As per the prior analysis, If Russia does invade Ukraine, this could finally spark off the crash 'puts' have been telegraphing, the Ukraine crisis has started to play out as warned:
Amid Ukraine/Russia tensions and the potential for slowing growth, markets have been trading far more defensively on Wednesday, tipping the stock markets over the edge of the abyss, almost:
SPX weekly chart
In the above analysis, the index has been shown to form a topping head & shoulders on the weekly chart with the price just having broken the prior weekly lows of Jan 24 2022. This is a significant development for financial markets during a pivotal milestone in the Ukraine crisis that just turned up a notch.
So, what has happened?
A lot!
Following news that Russian President Vladimir Putin had sent troops into separatist regions of Ukraine, the prospects of a deeper infiltration into the country was announced just after the Wall Street open by the United States of America. According to US intelligence, Russia will invade within 48hrs.
Further reports enhanced the risk-off moves on Wednesday that cited convoys of military equipment moving towards Donetsk in eastern Ukraine from the direction of the Russian Frontier. Consequently, Ukraine has planned to declare a state of emergency.
This gave rise to bullish respects for the yen, as shown in the following analysis from earlier in the US session:
The price action on the hourly time frame was making for a bearish structure, confirming the bearish bias:
the anticipated trajectory of the price is illustrated in the prior analysis on the chart above.
USD/JPY live market
As illustrated here, the price is now adhering to the expected trajectory as we draw to a close on wall Street.
The latest news wires out of the Ukraine crisis are most likely going to support the bearish thesis for the sessions ahead. Leaders of the two separatist regions in eastern Ukraine, Donetsk and Luhansk, have asked Russia for military assistance to 'repel Ukraine's aggression.
USD/JPY, weekly and daily chart outlooks
Considering the dire outlook for equities, the yen would be expected to pick up the flows and the weekly and daily charts are aligned bearishly as follows:
Meanwhile, AUD/JPY, the forex market's risk barometer is also being tipped over the edge as follows:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD retreats toward 1.0850 on modest USD recovery
EUR/USD stays under modest bearish pressure and trades in negative territory at around 1.0850 after closing modestly lower on Thursday. In the absence of macroeconomic data releases, investors will continue to pay close attention to comments from Federal Reserve officials.
GBP/USD holds above 1.2650 following earlier decline
GBP/USD edges higher after falling to a daily low below 1.2650 in the European session on Friday. The US Dollar holds its ground following the selloff seen after April inflation data and makes it difficult for the pair to extend its rebound. Fed policymakers are scheduled to speak later in the day.
Gold climbs to multi-week highs above $2,400
Gold gathered bullish momentum and touched its highest level in nearly a month above $2,400. Although the benchmark 10-year US yield holds steady at around 4.4%, the cautious market stance supports XAU/USD heading into the weekend.
Chainlink social dominance hits six-month peak as LINK extends gains
-637336005550289133_XtraSmall.jpg)
Chainlink (LINK) social dominance increased sharply on Friday, exceeding levels seen in the past six months, along with the token’s price rally that started on Wednesday.
Week ahead: Flash PMIs, UK and Japan CPIs in focus – RBNZ to hold rates
After cool US CPI, attention shifts to UK and Japanese inflation. Flash PMIs will be watched too amid signs of a rebound in Europe. Fed to stay in the spotlight as plethora of speakers, minutes on tap.