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The markets maintained a mixed mood as investors closely watch FOMC, BoE MPC members and ECB members address inflation concerns. The King Dollar rallied as Fed tightening looms ahead of Fed vice chair for supervision Barr’s speech. BoC is set to hike rates by 75bps to 3.25% in the New York session. Commodity prices remain weaker despite a recovery in oil prices.
USDCAD advanced by +0.20% ahead of the FOMC members’ line-up. The dollar remained firmer as markets expect Trade Balance data to rise from -79.60 B to -70.30B adding to the hawkish sentiments of the Fed. However, upside gains could be limited by BoC’s monetary policy release due in the New York session. The Central bank is expected to hike rates by 75bps to 3.25% boosting bids on the Canadian dollar. Critical levels to watch out for are the 1.3200 resistance and 1.3050 near-term support level.
EURGBP extended gains by +0.31% as Euro area Q2 GDP grows to 0.8% from a previous estimate of 0.6%. Markets are pricing in a 75bps hike by the ECB at their next policy meeting and ECB’s supervisory board member Jochnick will be speaking. BoE’s gov Bailey will be testifying at Monetary Policy Hearings before the Treasury. The pound was lagging as the Truss factor subsides. The bulls bounced off a 0.8600 psychological support and upside gains are capped by a 0.8680 level.
AUDJPY soared by +1.15% lifted by the weaker Japanese Yen. The BoJ maintains an ultra-loose monetary policy throwing the Yen under the bus. Investors are looking forward to the Japanese GDP data due for release early Thursday morning. On the other hand, the Australian dollar remains resilient as it shows a rise in GDP YoY Q2 from 3.5% to 3.6%. The AUDJPY rose from 0.9600 level to a 7-year high at 97.50 and a break above that high could reinforce a bullish outlook towards a 100.00 psychological level.
European stocks were trading in a mixed manner on Wednesday. FTSE100 was slightly down by -0.10% after 7300 near-term resistance continues to hold. Bears may target the 7000 level if 7150 fails to hold gains. DAX index fell by -0.58% as weaker oil markets weigh index. Critical levels to watch out for are 12900 resistance and 12400 support in the near term. CAC40 edged higher by +0.26% as bulls found near-term support at the 6000 level and upside gains are capped by the 6200 level.
US stock futures remained steady ahead of FOMC members’ address. S&P500 futures rose by +0.18% reclaiming the 3900 level and the next critical level to watch out for is the 3950-resistance level. Nasdaq futures were up by +0.13% ahead of the Apple product launch. Key levels to watch out for are the 12200 resistance and 12000 support. DJIA index futures gained by +0.20% as investors eye the US Trade Balance. Bulls bounced off a 31000 psychological support and, the 31500 and 32000 resistance levels.
In commodities, oil rallied as investors pay close attention to the API weekly outlook and EIA Short-term energy outlook. USWTI crude oil futures gained by +0.24% after bouncing off an 85.70 level and bulls may challenge the 90.00 psychological level. Brent crude oil futures rose by +0.30% from a fresh 6-months low and upside gains are capped by the 95.80 level.
