Midday Brief – Dollar gathers confidence ahead of FOMC minutes

Dollar rivals are down along with EUR despite hawkish expectations to raise rates by the ECB. The Sterling surrendered some ground to the NZD post RBNZ rate hike. US Stocks futures steady ahead of key US data.

GBPNZD slumped by -0.12% post-UK PMI data on Tuesday which made GBP bulls less confident. The negative data, however, relieved UK recession fears and BoE’s Pill commented that more rate hikes are needed. The RBNZ hiked rates by 50bps to 2.00% as expected and Governor Orr said there may be a need to raise rates above neutral. The hawkish tone from the RBNZ gave GBPNZD more ground below 1.9418. A deep below could be seen as far as 1.90500 if the 1.92500 current support is breached. Traders should pay attention to Orr’s speech later in the day.

EURUSD plummeted by -0.64% as the dollar nursed its wounds from a 101.67,4 week low. The pair’s bulls rally has been stopped ahead of FOMC meeting minutes, crude oil inventories and durable goods orders [MoM] data. Despite increasing hawkish signals from the ECB, the EUR is trading below 1.0700 with 1.0640 as immediate support. Further down bears may repossess 1.0600 and 1.0531. However, if EUR strength continues investors may look out for the 1.0800 psychological mark.

AUDCAD steadily slumps from 0.91200 resistance with -0.40% following AUD’s construction work done data for the first quarter at -0.9%. The commodity currency, CAD, gets the upper hand despite less than expected wholesale sales data on Tuesday and has core retail sales data released tomorrow. The downside momentum may extend to 0.9044 and 0.900 in the near term.

Gold trimmed gains -0.60% from 1870 resistance. The yellow metal has retraced after a five-day winning streak against the Dollar. EUR’s current strength has a positive impact on gold as its positive correlation resurfaces. Upside potential is limited by 1890 and bears are challenged by 1844 weekly support.

European stocks are seen shading off gains in the European session. The FTSE 100 has erased gains by -0.07% after establishing fresh highs in 2 weeks at 7560. A push up is challenged by 7625 monthly high and 7300 to the downside. CAC 40 is down by -0.67% and is trading below 6300. A move below 6193 may send the index revisiting the 6100 level. DAX bears continued below 14100 and is down -0.64% with 13692 support in focus.

US stocks Index futures hold steady as traders await Fed meeting minutes. The Dow Jones Industrial Futures gave up -0.17% below the 32000 mark. Downside momentum has 31600 and 31360 as barriers. S&P 500 futures lost -0.15% and is currently trading between a 3972 and 3932 range. The US 100 futures plunged by -0.22% and a bullish move is capped by 11900 resistance and a bearish move by 11586 support level.