The dollar started its recovery heading into the weekend on hawkish Fed speak despite disappointing retail sales data on Friday. In Europe, Italian CPI print softened and investors shifted their focus to ECB’s Lagarde speech later in the day. Early Tuesday morning, RBA meeting minutes will be due ahead of Australian inflation data.
GBPUSD was under bearish pressure on Monday as the dollar recovered in the European session. The US dollar was lifted by revived Fed rate hike expectations after Fed’s Waller commented that rates may need to stay high for longer. Investors traded the cable in a cautious manner ahead of the UK jobs data this week. On Tuesday, the UK earnings index including bonuses is expected to decline which may keep the sterling under selling pressure. Later today, BoE’s Cunliffe will be speaking along with the release of the US NY Empire State manufacturing index. The pair tanked -0.13% as bulls hung on the 1.2420 high. An extended dip may give sellers 1.2350 and 1.2300. However, a rebound to the upside may give bulls 1.2480.
EURCAD dropped -0.14% as the Eurozone inflation data together with a risk-off mood weighed. Earlier, the Italian CPI data showed that inflation in the country slowed to 7.6% from an estimate of 7.7% and a previous print of 9.1% in the year ending March. ECB’s Christine Lagarde is scheduled to speak later today ahead of the Euro area`s inflation data due Wednesday. Wholesale Sales along with Foreign Securities Purchases from Canada will be released during the day as investors await the country’s Consumer Price Index. The pair retreated after poking below a 9-day low at 1.4665. A further decline may set targets at 1.4600 and 1.4500.
AUDNZD gained +0.12% trading above 1.0800 as bulls target 1.0900. Traders await growth data from China due on Tuesday for defined moves in the pair. The Chinese GDP data is anticipated to rise to 4.0% from 2.9% in the first quarter on a year-on-year basis. Minutes from the Reserve Bank of Australia meeting will be released in the Asian session on Tuesday. The New Zealand Dollar continued to weaken ahead of CPI data on Thursday morning.
European stocks made fresh highs ahead of the US earnings. FTSE100 rose by +0.13% extending to Friday gains above the 7850, resistance-turned-support. Further up the bulls are capped by the 7900 level. CAC40 were slightly lower by -0.04% and critical levels to watch out for are 7600 high and 7400 low. DAX added by +0.05% as bulls attempt to challenge the 16000 high. A failure to break above that high, 15700 support is the next near-term target.
US stock futures were steady early Monday morning as investors awaited corporate earnings. US500 futures were slightly down by -0.09% from the 4150 level as bulls retract towards the 4100 level. US100 futures sank by -0.12% and upside gains are capped by the 13200 level, a September 2022 high. On the downside, 12800 remains a key support level. US30 futures traded steadily at -0.06% as bulls lose steam below the 34000 psychological level and a failure to break above that high, 33600 remain near-term support.
Elsewhere, crude oil prices traded a bit flat to start the week ahead of the earnings season. The tepid mood in crude oil prices comes ahead of Chinese GDP data for the first quarter. Brent crude oil was trading at +0.17% above $86.00. Bears may close the gap to $80.00 before rallying above $90.00. US WTI was up +0.30% with a bullish cap at $85.40.