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The Dollar continues its rebound on Tuesday ahead of the Fed rate decision. European gas prices soar higher on Nord Stream’s decision to lower supply to Europe. UBS earnings disappointed and CEO Ralph Hamers says “gas and inflation are major dangers”. ALIBABA announces primary listing in Hong Kong giving a boost to tech stocks.
NZDJPY plunged by -0.58% in the European trading session. The pair`s sellers got their optimism from the Japanese Core CPI {YoY} which was 0.1% more than the 1.5% previous. This coupled with the BoJ’s positive overall perspective on the country’s economy as seen by their monetary policy meeting minutes released early in the Asian session. The 84.70 is the near-term support and a break below that level will reinforce bearish targets at the 83.00 level. Bulls are capped by the 87.00 resistance level.
EURCAD fell -0.54% amid the European gas crisis. The Nord Stream 1 has reduced supply to Europe down to 20% seeing European gas prices soaring this summer. The Spanish PPI {YoY} fell to 43.2% vs 43.6% expected. The Canadian monthly Wholesale Sales for June are expected to rise to 2.0% from 1.6%. The oil-linked CAD is also getting a boost from higher oil prices on Tuesday. The pair failed to trade above 1.3150 and bears may target 1.3000 and 1.2890.
GBPUSD extends its losses by -0.51% as the dollar strengthens ahead of the Fed rate decision. The FED is expected to hike its rate by 75bps and investors are pricing in a further tightening in the next meetings. Growing fears of a global recession are also weighing on the sterling. The US will be releasing New Home Sales, CB Consumer Confidence and API weekly crude oil inventories. Critical areas to watch out for are the 1.2100 resistance and 1.1950 support.
European stocks mixed in the European trading session as investors digest earnings reports. DAX is down -0.22% and the index has near-term support at 13100, a 4-day low which coincides with the 200-day SMA while upside gains are still capped by 13450 resistance.
CAC 40 is up +0.08% with an intraday support at 6200 and resistances at 6250 and 6400. FTSE 100 soared by +0.54% being the biggest gainer in European equities. However, the index is still challenged by the 7370 6-week high. A breach of the current high may give bulls 7500 in the near term.
US equities futures are trading in the negative territory ahead of earnings reports. DJIA futures are down -0.09% trading in a tight range between 31900 and 31800 on Tuesday. Further gains are still capped by 32500 in the near term. S&P 500 futures are down -0.02% with support at 3900 and a bullish cap at 4075. Nasdaq futures are down -0.16% with critical support at 12000 psychological support.
Gold was steady as investors wait on US key data for bigger moves on Wednesday. Gold prices are trading within the 1715 support and 1740 resistance range. However, the yellow metal may retest $1700 if bulls fail to claim the 1750 resistance, a 13-day high.
