ATFXThe Russo Ukrainian war is still ongoing, but risk aversion has significantly diminished

Risk aversion sentiment: Yesterday, during the Asian and European trading periods, due to the impact of the Russia Ukraine war,gold、crude oilContinuously rising, with the former reaching its highest point1976USD, the latter touching100.54USD. However, during the US trading session, gold and crude oil prices fell significantly, with both ending in a long upward shadow, and the final closing prices were reported separately1905USD and93USD. From the perspective of price performance, North American traders tend to believe that the war between Russia and Ukraine will soon end and both sides will return to the negotiation table to resolve the issue. Alternatively, the restrained attitude of the United States and NATO, which means not helping Ukraine resist Russia, has led to a rapid decline in market risk aversion, and bulls betting on the "NATO Russia confrontation" have taken early profits. The next question is whether gold and crude oil can return to yesterday's highs. Has the risk aversion triggered by the Russia-Ukraine conflict really been exhausted? The answer lies in the subsequent development of the situation. The key point lies in Russia's intentions. If the subsequent competition is limited to the Donbas region in eastern Ukraine (mainly Donetsk and Luhansk), then risk aversion will be difficult to reignite, and gold and crude oil will also operate according to the normalized logic of supply and demand. If Russia's intention is to occupy the entire territory of Ukraine, then yesterday's competition is only a prelude, and the risk aversion sentiment will quickly amplify after a brief decline. At that time, gold and crude oil will also rise rapidly, and breaking through yesterday's high should not be difficult.

Crude oil supply and demand side: The US sanctions against Russia mainly involve the financial sector and do not restrict the export of oil and natural gas. There has been no significant change in the supply side of crude oil, and oil prices will still revolve around the logic before the outbreak of the Russia Ukraine war.OPEC+Prudent production increase (or insufficient production capacity), superimposed with the growth of crude oil demand, the normalization trend of crude oil is long, and the Russia-Ukraine conflict only accelerated the short-term rise.

Gold and US Index: While gold is rising, the US dollar index is also rising sharply, which is an abnormal performance. In the long run, gold and the US dollar index have a seesaw relationship, with one rising and the other bound to fall. The long-term logic of the US dollar index is relatively clear, and with the implementation of the Federal Reserve's interest rate hike policy, its probability of gradual appreciation. From this, it can be inferred that the long-term trend of gold should be bearish. The hedging attribute triggered by the Russia-Ukraine conflict can boost gold in the short term, but when the conflict ends, gold will also return to the "seesaw relationship" with the US dollar index.

Risk reminder: The return of Russia and Ukraine to the negotiation table, continued restraint by the United States and the European Union, and sudden changes in currency and epidemic levels may all lead to a decrease in the accuracy of the above analysis.
Market trend analysis:


Summary
ATFXThe analyst team believes that although event driven markets have high volatility and many opportunities, they are prone to reverse trends due to unpredictable developments, which may catch traders off guard if they do not respond in a timely manner. Therefore, those with poor position management skills and limited experience in short-term trading should participate with caution.

*Risk Tips and Disclaimers*
There are risks in the market and investment should be cautious. The above contents only represent the views of analysts and do not constitute any operational recommendations.