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Midday Update
Markets are experiencing a risk-on tone as investors draw optimism from the Kremlin’s citing of Ukraine’s neutrality compromise. Diplomatic talks are pointing towards peace and markets are already pricing in a possibility of a truce regarding the Ukraine/Russia war.
President Zelensky will be addressing US Congress later today, while President Biden will be speaking later during the New York session after pledging military assistance to Ukraine. The key focus of today will be the FOMC press conference where Fed Chairman Powell is expected to speak on monetary policy adjustment for the year.
The GBPUSD rebounded from 15-months lows as the pair finds near-term support at 1.3000 ahead of the BoE policy meeting on Thursday. The Pound got a boost from better-than-expected Claimant Count Change (Feb) and unemployment rate (Jan), and investors are pricing in a 25bps hike from the BoE. The pair spiked above a 3-day high although upside gains remain capped by 1.31000 near-term psychological barriers ahead of the FOMC policy meeting today.
The AUDUSD jumped +0.78% as the Chinese government vowed to keep markets stable in the near term while focusing on economic growth. The Aussie Dollar soared higher after finding near-term support at a 0.71816 trough. The bullish outlook remains challenged by 0.72852 near-term resistance which coincides with the 50-day moving average.
The NZDUSD opened higher on Wednesday, making a strong rebound from monthly lows ahead of New Zealand GDP figures on Thursday. The pair bounced off a 0.67330 monthly low and upside gains are capped by 0.68120, support turned resistance. Investors will be focusing on the FOMC minutes meeting and US Retail sales.
European Equities rallied amid growing hopes of a diplomatic resolution between Ukraine and Russia. The Dax rose +3% after bulls breached the 14075 near-term barrier and the trend may reach 14500 near-term resistance.
The FTSE soared +1.04% as the index experienced a bullish breakout above 7236.8 near-term resistance. The next significant resistance to watch out for is 7300 psychological resistance and a break above that high may give room for price to revisit 7400, monthly high.
The CAC40 extended gains by +2.95% after a breach of 6455, a 2-week high. The outlook is bullish in the near term and a challenge of 6650.6 resistance may open room for further upside.
US stocks made a strong rebound on Tuesday after President Zelensky indicated progress on peace talks with Russia. Nasdaq closed higher with a +3.16% gain after bouncing off the critical support at 13050.00.
The Dow Jones recovered +1.82% after bulls defended the near-term support at 33000. Upside movement remains capped by 34000 psychological resistance which coincides with a 50-day moving average. The S&P500 also jumped +2.14% reclaiming 4262.44 at the closing bell.
The index found near-term support at 4169.25 and faces a near-term resistance at 43000 psychological resistance. Gains in US equities may be short-lived as a hawkish tone from Chairman Powell will cause selling pressure on indices in the near term.
Bitcoin is up +2.81% after a price spike towards $41788.0 for the first time in 5 days. A break above $42740.00 is necessary to reinforce bullish appetite in the near term while a failure may cause selling pressure towards $36000 near-term support.
