Dollar lags behind stronger JPY and CHF currencies

Midday Update

The markets were a bit eased from risk concerns during the European session open as the EU Leaders summit continues to deliberate on immediate solutions to energy supply shocks. US signed a deal with the EU to replace Russia’s energy imports and investors weigh the implication of a supply blackout which may mean it is a long-term solution.

The US president, Joe Biden will be meeting counterparts in Poland to discuss the humanitarian crisis there. Global players prepare for the waste from Russia as Putin remains trapped in a corner by mounting sanctions.

The dollar index reclaimed loses early European session after finding near-term support at 98.400. The index is down -0.16% ahead of revised UoM consumer sentiment. The index is currently trading above a 50-day moving average on a 4-hour chart and a break below that area may give room for a temporary slide towards 98.00 support. However, a break above 99.00 may give room for upside gains towards 100.00 psychological resistance.

GBPCHF plunged down -0.30% post negative February UK retail sales( MoM) released during the European session. The retail sales unexpectedly fall by 0.3% versus 0.6 expected causing selling pressure on the pair in the near term. The price quickly bounced off psychological support at 1.2200 to 1.2240 and the next area to watch is at 1.2278 which coincides with a dynamic resistance, 50-day moving average on a 1-hour chart.

The NZDJPY trimmed some of its Thursday gains as Japanese yen firms after positive Core CPI for March. The inflation indicator shows continued economic recovery post- Omicron virus season. The NZDJPY traded off 85.200 near-term high losing -0.50% before bouncing of 84.45 near-term support. The pair is sitting on a 50-day moving average and a break below that area may see the risk-sensitive NZD retreating from highs in the near term.

European equities were up early Friday ahead of the EU leader’s summit. The Diplomatic meeting focused on easing energy supply pressure on the EU and reducing the exports of Russian energy. CAC40 was up 0.32% after bouncing off 6540 near-term support and has a possibility to trade towards 6682.8 which coincides with monthly resistance.

FTSE gained +0.20% as bulls attempt to breach the 7569.2 high which coincides with the 18 February high. Dax was up 0.92% post-US-EU deal to replace Russian gas imports although upside movement is capped by 14570 near-term resistance.

US equities closed higher on Thursday after the lowest Jobless Claims since 1969. The S&P500 closed +1.43% at 4520.00 while the Nasdaq rose +2.20% closing at 14765.00. The Dow Jones Industrial Index rose +1.02% closing at 34707.00 and a continuation towards 35000.00 near-term resistance is highly probable.

Oil slipped with some concerns easing over Kazakh supplies. USWTI crude oil futures fell -0.65%, retesting the $110.00 as diplomatic meeting softened the tone towards stopping Russian energy supplies into the EU. Brent dropped -2% as Canada pledged to increase exports to curb the current supply shortage.