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The markets opened with a cautious tone ahead of the critical week as investors focus on the RBA, Fed and BoE policy meetings. UK banks and the majority of Asian countries observe labour day. EU energy ministers hold an emergency meeting as the energy embargo over Russia causes a divide between EU countries.
Growth concerns loom as Chinese manufacturing and service data renew fear as it tumbles to 2-year lows. The Dollar Index surged by +0.17% above the 103.00 level early European session ahead of key US data release this week.
The Dollar found support at 102.80 following a retracement on Friday and the resilience in the dollar is due to the hawkish policy meeting outlook scheduled on Wednesday. Traders focus on the ISM Manufacturing PMI release later in the New York trading session.
The EURUSD shaded off its Friday`s gains by -0.20% as bulls failed to break above the 1.05867 level. The pair continues to plummet towards 1.0500 Friday`s support with the Fed`s hawkish expectation of raising its rate by 50bps.
The EURUSD continue to suffer selling pressure as mixed economic data from Spanish, German, French and Italian manufacturing PMI for April paints a gloomy picture. A break below the 1.0468 may renew selling pressure towards 1.0400 psychological support. Traders should pay more attention to this week’s US employment on Friday.
The AUDUSD has gained by +0.12% early European session ahead of the RBA policy meeting on Tuesday morning. The bank is expected to raise the rate by 15bps as a way of curbing the rising inflation in the country.
The pair bounced off from a 3month low at 0.70321 to broken support turned resistance at 0. 70775. A break above that resistance may reinforce a bullish interest towards 0. 71760. Traders shift their focus to the RBA policy meeting.
European equities were mixed as UK banks observe Holiday. The DAX was down -0.74% to 13778 as bulls failed to breach the 14200 area, coinciding with a 50-day moving average on Daily Chart. CAC40 pared earlier gains to +0.05% after slightly sweeping below 6320 making a fresh 6 week low. Bulls face a near-term barrier at 6600.00 midterm resistance.
US equities opened higher on Monday, after a huge drop on Friday due to a mixed Corporate Earnings report. The S&P futures were up +0.23% pre-opening bell, holding above the 4141.00 2-months low. A break below that support may renew bearish interests below the 4100.00 area. The Nasdaq futures gained by +0.27% after dropping by -4% on Friday.
The index is trading at critical support at 12800 which coincides with a 13-months low and a break below that immediate support will reinforce selling pressure towards 12000.00 psychological support.
The Dow Jones rose +0.22% from a 33000 support, although upside gains remain capped by a 34000 resistance, coinciding with a 50-day moving average on Daily Chart.
In commodities, Gold extended its drop by -0.80% to 1875 as the yellow metal remains underpinned by a stronger dollar outlook. USOIL plunged by -2.63% and Brent by -2.15% as Chinese lockdowns send growth fears after manufacturing and services data released showed slowing growth.
