Asian Markets fall at the beginning of the session

The tensions between Russia and the Ukraine keep rising, this time Ukraine’s president is announcing that a full war is imminent if Russia does not stop sending troops across the border to help the Pro-Russian rebels. This has caused risk aversion to come into the markets and the Asian markets have opened to the downside. The Yen loses more ground versus the Dollar as well as the Euro. The Euro keeps falling versus the greenback and it is very close to reaching the 1.3100 level. So far, the EUR/USD is at one year lows.

The Russian and Ukrainian tensions intensify

The Ukrainian president has accused Russia of sending troops across its borders into Ukrainian territory to help the Pro-Russian Separatists, which have advanced into another very important Ukrainian city. This news has rattled the financial markets and the investors and traders have sought the shelter of haven currencies like the Japanese Yen or the Swiss Franc. On the other hand, the Euro stays steady, but it could feel the effects of this news in the coming days, due to a rise of risk aversion. The Single Currency remains vulnerable to further loses if the geopolitical issues don’t calm down or until the economic fundamentals from the Eurozone show some strength.

The Dollar pulls back on risk appetite

The Dollar weakened for today as investors and traders look for higher yielding assets. In other words, risk appetite has risen and commodity currencies like the Australian, the New Zealand, and the Canadian Dollar have gotten the best part of it. The drop on the greenback has been attributed to profit taking and a needed correction on the US Dollar, due to the fact that it has been too over-extended to the upside.

On the other hand, the Euro could continue going lower after the current consolidation if there are no new fundamentals supporting the Single Currency. Tomorrow’s inflation report out of Germany is critical, because it could provide the European Central Bank with an excuse to implement more economic stimulus.

Will the NZD/USD pullback to the 0.8400 level?

The New Zealand Dollar has been strengthening versus the US Dollar and it looks like it wants to keep its bullish momentum as shown on the daily chart of the NZD/USD. If the fundamentals out of the US show any signs of weakness, then the pair may continue going higher and it may try to reach the next round number level of 0.8400. If the price does reach that price zone, then it may try to bounce from there to the downside or at least try to stall its rise there.

The Kiwi could still visit the 0.8300 level

The New Zealand Dollar keeps dropping versus the greenback as shown on the Daily chart. The downtrend is clearly well sustained and it has been behaving very “technical” around the recent round number prices, like the 0.8500 and the 0.8400. Even though on the Daily candle the NZD/USD is trying to correct a little bit, it has not shown an exact visit to the 0.8300 level. Therefore, a drop to that level is still possible and a bounce afterwards is not off the table.

Moving averages

Moving averages are price averages during a specific timeframe. The most common moving averages take the average of the closing prices.

Simple Moving Average (SMA)

It is the average of the closing prices over a certain timeframe. Since it is a simple average, the same weight is given to all data from beginning to end.

Exponential Moving Average (EMA)

This moving average gives more weight to the latest data and less weight to the oldest data. The EMA is more commonly used due to the fact that new data is more relevant than older data.

Types of Orders

Market Order
It is an order to buy or sell a currency pair at the price that the pair is being quoted at the moment.

Stop Loss Order

    It is used to close a position that has been opened at a specific level once the market gets to that level. It is used to minimized or control your losses or to protect profits already accumulated.

Limit Order / Take Profit

    It is used to close a position once it has reached a specific level of profits. Limit orders are also used to open a new position automatically once the market has reached a specific level.

Buy Limit.

An order to program a buy below the current price.

Buy Stop.

An order to program a buy above the current price.

Sell Limit.

An order to program a sell above the current price.

Sell Stop.

An order to program a sell below the current price.