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Markets experienced a risk-off mood as investors take a cautionary stance amid Central Banks Bonanza. The Fed Chair Jerome Powell signalled a hawkish stance over the future monetary policy path after delivering a 50bps on Wednesday. The dollar strength dominated markets while investors shifted focus to BoE, ECB rate decision, US initial Jobless claims, US retail manufacturing and industrial production. The SNB delivered a 50bps as markets anticipated.
GBPUSD reversed a 6-day winning streak by -0.87% as traders digested the Fed`s hawkish guidance ahead of the BoE rate decision. On Wednesday, the Fed delivered its promise of 50bps and noted that they will continue on the tightening path until the target inflation is met. That said, the focus shifts to the BoE`s decision following a decline in CPI {YoY} at 10.7% vs 11.1% previous. Having that in mind the cable turned south after retesting 1.2450 and found temporary intraday support at 1.2300. A move lower may give 1.2200 and 1.2100 in the near term.
The Euro gained by +0.23% against the Japanese Yen as investors eye the ECB policy decision. The ECB is expected to add 50bps to the current borrowing rate, of 2.00%. An extended rally may be challenged by the risk-off mood on the day as investors flee to safe-haven currencies such as the Japanese Yen. On the upside, bulls may be challenged by 145.50 and 146.00 levels while bears may reclaim 144.20 and 143.00 on the downside.
AUDCHF dropped by -1.00% as the Swiss National Bank hiked rates. The SNB hiked rates by 50bps to 1.00% in a bit to curb soaring inflation. The CHF advanced on safe-haven bids as investors stay on the sidelines to digest a slew of global economic data. The Australian dollar slumped despite strong domestic employment data, as the miss in Chinese data weighed on the AUD on global growth worries. The pair dropped below an 8-week low towards the 0.6270 level and a break below that level could trigger further selling towards the 0.6200. Upside gains are capped by the 0.63500 level.
European stocks plunged ahead of key central banks’ policy meetings. The FTSE100 was down by -0.49% trading between the 7500 resistance and 7400 support levels. A break below the 7400 could trigger bearish pressure towards the 7300 and 7100 levels, while gains are capped by the 7500 and 7600 levels. CAC40 lost by -1.30% as French inflation data missed expectations. Bears moved lower from a 6700-resistance level towards the 6650, near-term support. A break below that level could extend the leg towards the 6400 level.
DAX was down by -0.80% as bulls failed to challenge the 14500, near-term high. Bears are currently targeting the 14200 support and a break below that level could give way for bears to reclaim the 14000 psychological level.
US stocks futures pointed lower as Fed Chair Powell hints further Fed tightening. The S&P500 futures slumped by -1.28% from the 4000 psychological resistance towards the 3900 near-term support. Nasdaq100 futures sank by -1.52% and critical levels to watch out for are the 12000 resistance and 11500 support zone. DJIA index futures lost -1.03% as bulls lost steam below the 34000 level and the next key target to watch out for is the 33500-support level.
Gold plunged below the 1800 level as Fed hawkish sentiments triggers correction from a 5-months high. The yellow metal was down -1.56% as bears target an 11-day low at the 1770 level.
