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Midday Update
Markets were quiet early Thursday morning as traders sit on their hands for the ECB policy meeting. The ECB members will be debating their policy in Frankfurt later today and the Russian invasion of Ukraine’s threats to economic growth will be at the top of their agenda. Investors will focus on corporate earnings early New York session, while heavy FX options expiring today may cause huge market volatility.
JP Morgan’s results on Wednesday were hit by $524 million losses tied to Russia and more US bank earnings are expected later today as the outlook turns gloomy. US and EU send military aid to Ukraine indicating the war atmosphere is far from over.
EURCHF extended gains by +0.29% ahead of the ECB policy meeting today. Investors are looking to see if the ECB will affirm a quicker stimulus exist amidst rising inflationary pressure.
The pair is currently challenged by 1.0200, psychological resistance, and a break above that area may see bulls attempting to reclaim 1.0300. The 1.0100 support remains critical support to maintain a bullish outlook in the near term.
AUDCAD extended losses by -0.22% post hawkish BoC policy results. The BoC hiked rates by 50bps on Wednesday, while the AUDCAD is underpinned by negative employment data for March. The pair is currently trading at 0.9350, 3-week support and a break below that area mount selling pressure in the near term.
USDCAD continued to drop by -0.17% early Thursday ahead of important corporate earnings reports. The pair made a huge plunge from a 1.26500 near-term high on Wednesday post-BoC rate hike.
A defence of 1.2525 may see bulls attempting a target at 1.2600. However, a failure to hold that area will cause short-term selling pressure on the USDCAD towards 1.24500. There will be a release of US retail sales, employment data, and Manufacturing sales for Canada during the New York session.
The European equities were mixed ahead of the ECB monetary policy meeting. The FTSE was down by -0.06% as the index remains inside a 3-day rangebound between 7595 and 7535 area. The CAC40 rallied +0.71% and gains remain capped by 6600 near-term high.
The index is currently trading inside a range between 6600 and 6450 area for the last 7 days and huge volatility could be experienced in the near term. The DAX traded higher by +0.22% to the 14100 area while bulls face the 14400.00 near-term barrier.
USD equities futures were unchanged as investors focus on the earnings season. The Nasdaq futures were up +0.13%to a weekly high at 14400 and a break above that area may open room for upside gains towards the 14700.00 near-term high. S&P500 edged higher by +0.14% premarket open and upside gains are capped by 4510 near-term high. The DJIA index was up by +0.28% as bulls move away from 34320, the monthly low. Upside gains are underpinned by a 35000 near-term barrier.
USWTI was down -0.54% as bulls lose steam at 104.00 near-term resistance as investors digest the downward revision of Global oil demand. Brent plunged by -1.48% as 110.00 near-term resistance held.
In cryptocurrency, Bitcoin shaded off -0.38% after rallying for 2-days. Critical areas to watch out for are $42000 resistance and $39000 near-term support.
