Sterling Shines at the Beginning of the European Session

Despite tensed geopolitical situation, markets are trading fairly quiet, not moving much and staying in about the same place as they were on Friday and Monday.

The current consensus on the incident in Poland is that it was a missile fired by Ukrainian Air Defense systems protecting Ukrainian skies from Russian rockets. This finding, although still disturbing, allowed to ease the tension around the world as it doesn’t mean that Russia directly hit NATO territory.

Today’s macro calendar opened with data from the Australian job market, which came better than expected. Employment rose and unemployment dropped. Although numbers are flashing green, the Australian dollar didn’t really use it for gains. It’s fair to say that AUD enters the European session on the same levels as it ended the American one yesterday.

Still on the calendar we have the Philly Fed Manufacturing Index and a few speeches from various central bankers, nothing really major.

Indices enter the Thursday European session on the front foot, trying to use momentum from the “no there won’t be World War III, at least not today” scenario. SP500 futures are up 0.3% while DAX futures are up 0.5%.

On the forex market we have a few interesting stories. USDJPY is still trying to defend the 139 support. As for now, they are successful but  sellers are not giving up, which significantly increases the chances for a breakout.

The British pound is starting Thursday with nice optimism pushing GBPUSD on daily highs and ERUGBP to daily lows. Those moves can extend further down the line.

Worth mentioning is the correction on Gold, which finally arrived after almost 8 days of constant growth. The correction doesn’t start in a random place. We are precisely on the 38,2% Fibonacci of the downtrend, which started at the beginning of March – definitely a good place to take some profits from the most recent run.