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Markets experienced a risk-on mood early Tuesday as investors resumes trades after the US holiday. Investors are looking at Central Bank policy in a broader view as the risk of recession lingers. RBA governor Lowe indicated a possible 75bps hike at its July meeting as the country battles inflationary pressure. Fed’s Barkin and Cleveland Fed president Meister will be speaking later in the day.
EURUSD rallied by +0.52% early in the European session as ECB members forecast rate hikes in the near term. ECB’s Rehn indicated that the September rate hike could be more than 25bps. There is also a broad weakness in the US Dollar ahead of the US existing home sales for May. Bulls have a near-term barrier at 1.0600 and a break above that near-term barrier, the 1.0800 could be in sight in the near term. Near-term support is at 1.0400 psychological figure.
GBPJPY surged by +0.71% ahead of the UK inflation data early Wednesday. The inflation data is expected to rise from 9.0% to 9.1% YoY underpinning further monetary policy tightening by the BoE. The pair has a near-term resistance at 168.732 and support at 160.00. Traders should pay attention to the BOE MPC member Tenreyro’s speech later today and BoJ monetary policy meeting early Wednesday morning.
AUDCAD trimmed earlier gains dropping -0.16% as rising energy prices boost the Canadian dollar. The Aussie spiked higher early Tuesday morning after RBA’s Phillipe Lowe forecasts a possible rate hike at the July policy meeting. However, bulls lost steam near the 0.9050 ahead of Canadian Retail sales data due for release in the New York session.
Upside gains are capped by 0.91300 and bears are currently trading slightly above the 0.9000 psychological level. A break below that level could open the way for the 0.8950 level in the near term.
European equities opened higher as risk-on profile returns to the markets. FTSE100 extended gains for the second day by +1.00% as bulls found near-term support at the 6975 level. Upside gains are capped by 7200 and 7300 barriers.
DAX rallied by 1.16% as bulls attempt to fill in the price action gap between 13757.00 and 13650.00 levels. The near-term support is at 13200. CAC40 soared by +1.78% as bulls find a foothold above the 5900 level. Gains are capped by 6025, previous support turned resistance.
US stock equities rebound after massive wealth destruction week. The S&P500 futures took a breather, soaring +0.84% early Tuesday morning after finding near-term support at the 3641 level. A critical level to watch out for is the 3800 psychological figure and the 3500 level, if bulls fail to challenge the near-term barrier.
Nasdaq100 futures rose by +0.88%, a third-day gain as bulls found near-term support at the 11100.00 level. Bulls face a near-term barrier at the 11600 level. Dow Jones Industrial index edged higher by +0.81% as 30000 support holds, however, gains are capped by the 31000 psychological barrier.
Crude oil prices edged higher after a major slump on Friday. Brent rose by +1.48% as bulls managed to defend the 112.30 near-term support. Gains are capped by the 118.00 psychological level. USWTI opened higher by +0.20 despite bulls struggling to hold gains above the 108.40 level.
