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Midday Update
Markets are sending mixed signals after Kremlin comments major progress in Ukraine “wrong”. Investors are worried about the risk implications of the war in Ukraine and the slowing growth in the global economy despite interest rate hikes in the near term.
ECB, President Lagarde also stressed the need for flexibility as war risks new price trends. Traders watch BoE interest rate policy meeting as inflation in Eurozone climbs faster than expected due to a surge in energy prices.
The EURUSD extended gains early European session post-Fed policy meeting as investors worry over slower economic growth. The pair is currently trading above the weekly high after the price closed above 1.1000 on Wednesday and upside gains remain capped by 1.1100 near-term resistance. Fed Chairman Powell indicated that 25bps is not enough to curb the soaring inflation worsened by the Russian/Ukraine war and forecasted an additional 6 rate hike cycles in 2022.
AUDJPY rose by +0.63%, Thursday morning as AUD gets a boost from the positive unemployment rate and Chinese stimulus relief to boost economic growth. The pair claimed 87.00 after breaching a near-term resistance at 86.20 and bulls may target 89.125 near-term resistance which coincides with September 2017 high.
CADJPY broke above 93.00 near-term resistance on Wednesday, post hot Canadian inflation data for February. The CADJPY is currently trading above a 6-year high at 93.329 although during the European session the trend was unchanged. Upside movement needs to challenge the 94.00 near-term psychological resistance to open the door for further gains.
USDCAD currently trading below a 9-day low ahead of US labour data and Philly fed Manufacturing index at 1.2658. The pair is under selling pressure as the dollar weakens post-Fed meeting on Wednesday and a break below 1.2650 may open the possibility of trading towards 1.2600 psychological support.
European equities slipped early Thursday after pessimistic comments regarding Ukrainian talks from Kremlin. The DAX was down -1.13% shading off its Wednesday gains as war sends shockwaves across European industries. The index may close a price action gap between 13920.32 and 14200.00 before a remarkable move to the upside.
The CAC40 slid lower losing -0.67% as bulls fail to break above 6650.6 near-term resistance. FTSE recovered losses post-BoE policy meeting although bulls remain capped by 7336.2, yesterday’s high.
US equities closed higher on Wednesday post-Fed policy meeting as investors were still digesting the implications of rate hikes on economic growth.
The Nasdaq was up +3.70% while DJIA index was following with +1.55% gain, although upside gains remain capped by results of the diplomatic talks between Ukraine and Russia. S&P500 rose 2.24% and bulls face a near-term resistance at 4359.0 which coincides with a price action gap between 4340.00 and 4357.00.
Gold recovers +0.63% post-Fed meeting and is boosted by renewed geopolitical pressure as the US sends $800M military aid to Ukraine.
