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The dollar recovered losses against major assets early Thursday trading session as the Fed delivered an expected 75bps hike. Investors shift their focus to Fed chair Yellen’s speech later in the New York session and US GDP data. Stocks were mixed amid rate hikes and earning seasons data. Crude oil stocks rallied as tight supply improved sentiment. President Biden and China’s Xi have a call today on adjusting tariffs on Chinese products.
USDJPY plunged by -0.62% early Thursday morning as Fed Chairman Powell failed to deliver a clear forecast for the rate hike cycle. The Fed delivered a 75bps rate hike late Wednesday and the USDJPY dropped towards the 135.00 level. A break below that level could cause further selling pressure towards 132.00 coinciding with June 15 lows. Upside gains are capped by the 135.80 level and a breach above that level could invalidate the bearish outlook. Traders shift their focus to the US Initial Jobless Claims and Q2 GDP data.
AUDCAD was slightly lower by -0.10% weighed down by Australia’s negative Retail Sales. The AUD Retail Sales MoM for July dropped from 0.5% surveyed to 0.2%. The Canadian dollar strengthened as US Crude Oil inventory data showed greater demand for crude products boosting the Canadian dollar as an exporter of oil into the US. The pair trimmed gains from the 0.8980 level and the next critical support level are the 0.8900 psychological level. A break above the near-term resistance could reinforce bullish strength towards the 0.9100 level.
European stocks trimmed earlier gains ahead of German Inflation data. FTSE100 plunged by -0.61% as bulls lost steam at the 7400 near-term resistance. The near-term support to watch out for is at the 7300 psychological level.
DAX index edged lower by -0.11% as 13200 resistance continues to hold. The next critical level is at the 13000 level, however, a break above the near-term high bulls could target the 13450 level.
CAC40 was down by -0.48% as bulls found a near-term resistance at the 6300 level. The bullish outlook is defended by the 6250 and a break above the 6300 level, an extended target could be at the 6400.
US Stock futures were lower as yields rallied on the hawkish Fed. S&P 500 futures dropped by -0.19% towards the 4000 psychological level and a break below that resistance-turned-support may cause a near-term retracement towards the 3950 level. If bulls manage to defend the 4000 immediate support, a rally towards the 4100 could be experienced in the near term.
DJIA Index timed gains by -0.11% as bulls continue to defend 32000 previous resistance-turned-support. Bullish targets are at the 32800 level and a break below the 32000 support could invalidate the near-term outlook.
The Nasdaq100 futures index was lower by -0.35% weighed down by Meta delivering a disappointing Q2 earnings report. Meta dropped by -4.79% pre-bell and investors are waiting for the Apple, Amazon and Intel report later in the day.
Gold rallied by +0.41% as inflation concerns heated up amid Fed failing to provide forward guidance on the interest rate cycle. Gains are capped by the 1750 level and with a break above that level, bulls could target the 1780 level in the near term. The 1700 psychological support is critical as a gauge of outlook in the near term.
