Markets struggled to hold earlier gains as investors try to find a foothold amid central bank monetary policy tightening, inflation fears and war in Ukraine.US continues to support Ukraine with further military aid while OPEC+ members weigh suspending Russia from its production goals. ECB members Lane, Panetta and FOMC members William and Bostic will be taking centre stage in the New York session.
USDCAD remained neutral at 0.01% ahead of the BoC interest rate decision. The rates are expected to rise by 50 bps to 1.50% giving a positive outlook for a stronger Canadian dollar amidst rising energy prices. The pair broke below the 1.2650, coinciding with a daily chart’s 200-day moving average and bears have a possibility to drop towards the 1.2550 level. Investors should watch out for US ISM Manufacturing data for April and May later in the New York session.
GBPJPY rallied by +0.52% in the early European session as a positive Housing Price Index boosted the pound. The National HPI (YoY) rose from 10.5 surveyed to 11.2 while the month over month data increased from 0.6 estimated to 0.9. Critical areas to watch out for are the 164.00 and 1.64.60 levels against upside movement. Bears may target 161.80, previous resistance turned support if the resistance fails to hold.
EURCAD extended its losses by -0.41% post positive Australian GDP data early Wednesday morning. The GDP data increased from2.9% estimated to 3.3% while GDP (QoQ) grew from 0.5 forecasted to 0.8%. Moreso, the Chinese Caixin Manufacturing PMI also helped boost the Australian dollar as demand for commodities resurfaces. Bears may target the 1.4750 if the pair breaks below the 4-week low at 1.4890. Upside gains are capped by the 1.5000 high.
European equities were mixed as Eurozone economic data sent mixed signals. Dax rose by +0.27% and upside gains are capped by the 14600 near term resistance and a break above that level may open extended targets to the 14800 level, a 3-months high.
CAC40 extended drop by -0.08% and sits at critical support at 6460.00. Bulls need to challenge the 6580 resistance to maintain a bullish outlook, otherwise downside pressure toward the 6300 psychological support. FTSE 100 trimmed earlier gains to 7575, a 3-day low. The index lost its gains by -0.10% and has a possibility to trade lower towards the 7540 level if the 7650 resistance holds.
US equity futures were unchanged as investors assess the OPEC+ outlook. S&P 500 futures were down -0.01% pre bell as bulls remain challenged by the 4200 barriers. Bears may target the 4000 if they manage to break the 4100 support. DJIA Index futures rose by +0.11% although bulls are challenged by the 33500 level. A failure to break above that area may see bears targeting the 32700 area. Nasdaq futures plunged by -0.2% as bulls faced the 12800 barrier and the next critical area is the 12200 and 11500 support levels.
Gold plunged by -0.40% as dollar bids renewed. The yellow metal broke below a 6-day low at 1840 and has the potential to revisit the 1810 level.