During yesterday's summit in Brussels Barrack Obama offered Europe energy diversification. Such a decision was made amid tougher sanctions against Russia.
In particular, President Obama claims that the USA is ready to fully cover the EU's daily natural-gas needs. Apparently, this step is made in order to reduce Europe's dependency on Russian natural gas. It came as the result of the latest situation around Ukraine, including the recent annexation of the Crimea to the Russian Federation.
After the conference in Brussels, Obama announced another round of sanctions against Putin's Russia. Still, these sanctions are going to be introduced if Russia doesn't change its aggressive politics towards Ukraine. Obama underlined that these are the toughest sanctions since the cold war between the USSR and the USA.
Apparently, the energy supply diversification will be the major part of the sanctions against Russia. Still, this process requires calculations and comprehensive analysis. Therefore, it will definitely take a lot of time to put the ambitious plan into practice.
At the same time, the G7 leaders decided to exclude Russia from the prestigious club (which used to be called G8) and to cancel the forthcoming G8 summit in Sochi, Russia. At the same time, the G7 club also imposed some sanctions on Russia.
Market Reaction
Apparently, the geopolitical situation in the region remains tough. Russia is a major geopolitical player and it cannot but influence global financial markets.
Experts report that the VIX indicator remained relatively stable without indicating higher volatility. Yesterday, it was fluctuating within the 13,46-14,50 range. If the index stays below 20, this means big-scale investors are not worried too much.
Still, the US stock market has been showing weakness for 3 consecutive days. Yesterday, S&P 500, Nasdaq and Dow were down by 0,70%, 1,43% and 0,60% respectively.
The biggest losers are the biotechnological and social media sectors. These sectors used to be the biggest gainers in 2013.
Facebook is currently the biggest loser among all US stocks. It is down by 3.2%. At the same time, iShares Nasdaq Biotechnology has recently dropped by 0,7%. Some experts believe this is the first wake-up call indicating that a bigger decline i coming.
As for Forex, the trading experts working for Masterforex-V Academy analyzed the situation to see that USDJPY and USDCAD were the most volatile currency pairs yesterday.
The currencies were down by 0,60% by yesterday's American session.
At the same time, EURUSD traded within the scope of the 1,3776 – 1,3808 range, thereby indicating uncertainty dominating the market.
As for the technical analysis, it looks as follows:
According to Masterforex-V Academy, the H1 chart of EURUSD indicates a mid-term recovery against a bigger-scale decline. Therefore, the common European currency is recovering against the US Dollar at this point. The consolidation of the currently pair is currently taking place within the scope of the 1,3846 - 1,3748 price range.
Most likely, the US Dollar is still uncertain about the direction of its further movement.
If the decline is resumed, we may see the price pinning through the level of support located at 1,3748, If this is the case, the further downward targets will be calculated with a glace at a bigger-scale timeframe.
Alternatively, if the recovery continues, we may well count on a break above 1.3846 and further up to the MF pivot located at 1.3941.
