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Midday Brief
The US and Chinese officials will be holding diplomatic talks later today, over Ukraine/Russia crisis and the commodity markets are retreating from multi-year highs. The currency markets are focusing on FOMC, and Bank of England policy meetings scheduled for later this week.
The GBPJPY extended gains above 153.00 as bulls target 155.00 near-term resistance ahead of the Bank of England interest rate meeting scheduled on Thursday. Early Monday, the GBPJPY rose 0.43% towards 154.000, near-term support as bulls attempt to price in a 25bps hike by the BoE on Thursday. On the other hand, the Japanese yen continues to suffer selling pressure amid diminishing safe-haven demand and unchanged Bank of Japan policy meeting minutes scheduled for release this week.
The GBPCHF is currently range-bound for the fourth day between 1.2162, near-term support, and 1.2226 Friday high. Bulls are currently capped by 1.22000 psychological resistance and a break above that area could renew bullish appetite towards 1.23000 near-term resistance. Investors turn their focus on Employment data from the UK scheduled for release early Tuesday morning, while PPI data (Feb) for Switzerland will be released, later the same day.
GBPNZD is up 0.18% as the trend downtrend halts at 1.0957 near-term support as the New Zealand Dollar weakens from diminishing commodity prices. The pair has a near-term resistance at 1.9300 which coincides with a 4-hour chart 50-day moving average and a break above that area may give way to bulls retesting the broken 3-months support at 1.9362.
The NZDUSD opened lower on Monday morning as commodity-backed currencies are losing demand ahead of the FOMC policy meeting scheduled on Wednesday. The pair broke below 10-day support at 0.6800 and the possibility of trading lower is reinforced by New Zealand’s main trading partner China, resuming lockdowns due to a spike in reported COVID 19 cases lowering NZD trade exports in the near term.
European equity markets were up on Monday morning as energy prices retreated from multi-year highs. FTSE 100 rose +0.70% as bulls attempt to break above 7236.00 near-term resistance. The index has a price action gap between 7120 and 7140, hence price may trade lower before significant movement in the near term.
The CAC40 shaded some of its earlier gains as bulls failed to trade above 6400. The Index is currently up 2% and has near-term support at 6200. DAX also shaded some gains after hitting 14075, which coincides with March 2 highs. A failure to break above that high may cause downside pressure towards 13206 near-term support.
US Equities closed lower on Friday ahead of Fed monetary policy scheduled on Wednesday as investors are anticipating an aggressive hawkish tone from the Fed. The Dow Jones was down -0.69% and closed at 32 944.19 while the S&P 500 lost -1.30% and bears are targeting 4169.56 near-term support. The Nasdaq dropped -2.18% and maintains a bearish outlook which may target 13000 near-term support.
US WTI extended losses below 104.20 near-term support losing -5% on Monday. The crude oil has near-term support at $100/Barrel and a break below that area may cause further downside pressure. The energy markets are easing as diplomatic negotiations are focusing on a peace agreement.
