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20.04.202209:56 Forex Analysis & Reviews: US stock market rallies strongly amid heavy fighting in Eastern Ukraine

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Exchange Rates 20.04.2022 analysis

S&P500

US stock indexes rallied strongly on Tuesday, with the Dow Jones gaining 1.5%, and the NASDAQ rising by 2.2%. The S&P 500 increased by 1.6%.

The S&P 500 is trading at 4,462 and is expected to be in the 4,430-4,490 range.

Shares of Netflix plunged by 20% in after-hours trading after the streaming giant reported a loss of 200,000 subscribers over the past 3 months. Netflix lost 700,000 Russian subscribers after exiting Russia, but gained 500,000 subscriptions elsewhere.

US indexes advanced on Tuesday as investors assumed high inflation and the Fed funds rate hike were unlikely to severely affect company earnings. Furthermore, on Monday and Tuesday the S&P 500 traded 10% below its starting price at the beginning of 2022, attracting investors expecting the market to regain its previous highs.

Crude oil prices fell by 5% or $5 on Tuesday. Brent crude is trading at $108 per barrel on Wednesday. The commodity retreated as the IMF revised its global economic growth outlook downwards, pushing down the projected demand for oil as well. Oil decreased amid a strong rally in the US stock market.

Natural gas prices have been highly volatile, with commodity prices at the ICE falling to $950 on Tuesday and jumping to $1050 early on Wednesday. New car sales in the EU fell in March by 20% amid high fuel prices. US crude oil stockpiles decreased by 4.5 million barrels over the past week.

The International Monetary Fund has decreased its EU GDP growth outlook to 2.8%, well below its previous forecast of 3.9%. The US economic growth outlook was lowered to 3.7% from 4%.

USDX is trading at 100.70 and is expected to be in the 100.40-101.00 range

The US dollar index found strong resistance at the 101.00 mark, which stopped its upward movement. USDX remains within the price range. EUR is trying to reverse upwards.

USD/CAD is trading at 1.2575 and is expected to be in the 1.2500-1.2650 range.

The pair remains withing the price range, as retreating US dollar was counterbalanced by falling oil prices.

The US market is expected to continue its upward trend. At this point, Fed tightening does not influence indexes, and long positions could be opened during retracements.

Heavy fighting continues in Eastern Ukraine for the second straight day, as Russian troops try to push Ukrainian forces out of Donetsk and Luhansk regions, which are claimed by Moscow as territories of the Donetsk and Luhansk People's Republics. The Azovstal steel works, the last remaining pocket of Ukrainian resistance in Mariupol, has been bombed with 3-ton bombs. Its defenders have refused Russia's ultimatum to surrender. Russia has yet to make any gains since the beginning of the new offensive. Peace talks have been halted as Moscow wants a military victory to strengthen its negotiating position, while Kyiv is fervently resisting. In the meantime, Western military support for Ukraine is increasing. The Ukrainian army is now receiving more and more equipment, including heavy weaponry.

The outcome of the battle and the war in general would be decided before May. The course of the battle would likely be clear over the next few days.

Eseguito da Jozef Kovach
Esperto analista di InstaForex
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