The Dollar advanced as investors seek the safest route amidst a slew of risky events. Inflation and global growth fears continue to dominate the markets. China intensified lockdown measures to achieve Zero-Covid fuelling the market rout. Central Banks continue to race to tame soaring inflation and FOMC member Bostic will be speaking in the New York session.
USDCAD rallied by +0.38% ahead of key US economic data. The dollar advanced on the hawkish Fed and the general weakness of the Canadian dollar. Falling oil prices continue to underpin Canadian dollar weakness. The pair extended gains for 3 consecutive days to a 22-months high at the 1.32200 level and a break above that level could trigger further upside targets to the 1.3380 level. Traders will be closely checking the Initial Jobless claims and US Manufacturing data.
GBPCHF plunged by -0.35% as rising retail sales in Switzerland boosted the CHF strength. Switzerland’s retail sales YoY rose to 2.6% against 0.9% surveyed while the Inflation print extended to 3.5% from 3.4%, July’s reading. The Pound was under selling pressure despite the rising Housing Price Index as inflation pressure bites the economy. The pair edged lower after bulls got rejected at the 1.1400 resistance level and it is currently trading above the 1.1300 support. A break below that level could trigger selling pressure towards a 1.1250 area, a 30-months low.
EURJPY eased from a 4-day rally as German Manufacturing PMI indicates an economic contraction season. German manufacturing PMI dropped to 49.1 vs 49.8 surveyed. The EUR remains bullish against the JPY as the policy divergence widens on the hawkish ECB. The pair retreated from a 6-week high at the 140.00 level and could experience a retracement towards the 139.20 level. However, a break above the 140.00 level could trigger a rally towards the 142.00 level.
European stocks tanked for the 5th day as investors face a number of risky events. FTSE100 lost by -1.31% to a 7-week low at 7180 and a break below that level could trigger a bearish run towards the 7050 level. CAC40 tanked by -1.19% breaking below the 6100 near-term support and 5900 and 5800 are critical levels to watch. DAX was down -1.40% trading below the 12800 level and the next critical support level to watch out for is the 12400 mark, a 34-months low.
US stocks extend slide into September as investors worry over Fed tightening. S&P500 futures slumped by -0.88% towards the 3900 level and a break below that level could see bearish targets at the 3800 psychological level. Bulls are capped by the 3950 level, a support-turned-resistance. Nasdaq100 futures dropped by -1.34% as bears dominate the trend towards a 11600 level. However, a reclaim of the 12200 could attract bulls in the near term. DJIA index futures fell by -0.72% below the 31500 near-term support and bears could target the 30500 level.
Gold slips by -0.56% below the $1700 level on an aggressive Fed-rate hike in September. Bears may target the 1680 level ahead of Friday’s US jobs data. FOMC Member Bostic will also be speaking later in the New York session.