Markets were steady on Wednesday as investors pay close attention to US economic data and the OPEC meeting on crude oil production plans. Geo-political tension eased into Wednesday as Pelosi’s visit to Taiwan did not provoke a reign of Terror as China had warned making markets take a breather after a major sell-off on Tuesday. Stocks maintain stability amid the earnings season.
GBPNZD rallied by +0.37% in the early European session lifted by a miss in New Zealand’s Q2 Employment Change QoQ data. The Employment Change data missed expectations to 0.0% from 0.4% surveyed. Unemployment also rose to 3.3% against the 3.1% forecasted indicating a weakening labour market. The Pound remains stronger ahead of the BoE hike on Thursday. The bulls broke above the 1.9450 resistance and the next target could be 1.9650, a 5-months high.
EURCHF surged by +0.47% as investors embrace a risk-on mood on Wednesday. The risk-on mood and positive German Trade Balance data in June boosted bids on the EURCHF. The CHF inflation in July dropped to 3.4% from the 3.5% estimated causing further downside pressure on the CHF. The pair rose from 0.9725, an intraday support and upside gains are capped by the 0.9800 psychological barrier.
USDCAD was down by -0.16% ahead of the OPEC meeting. Investors are paying close attention to the US crude oil inventories and OPEC+ position on the Crude oil outlook going into September. The pair shaded earlier gains as hawkish Fed sentiments faded.
The pair found near-term support at 1.2850 and a failure to break below that level, bulls may attempt to break above the 1.2900 psychological level. US services PMI and Factory orders will be released along with other US economic data in the New York session.
European stocks were steady with the earnings season in focus. FTSE100 rose by +0.08% as bulls remain resilient above the 7400 level. A break above the 7450 level could reinforce the outlook towards the 7500 level. DAX gained by +0.09% with gains capped by the 13500 level. A breach above the near-term resistance could see bulls target the 13650 and 13750 levels. Critical support is at 13400 and a break below that level, the index could take a further retracement towards the 13000 level.
CAC40 soared by +0.44% lifted by positive French Services PMI data. The July data rose from 52.1 surveyed to 53.2 level suggesting an expansionary economic outlook. Bulls remain resilient above 6400 despite gains capped by the 6500 and 6600 levels.
US Stocks rallied as the dollar took a beating ahead of Key economic data. S&P500 futures soared by +0.39% despite bulls capped by the 4200, a 4-months resistance. A break below the 4100 near-term support could see bulls giving away gains towards the 4000 level.
Nasdaq100 futures gained +0.50% and upside gains are capped by the 13000 level. A break above that level could trigger buying pressure towards the 13500 area. DJIA index futures recovered by +0.30% and bulls may attempt to break above the 33000 level. The bulls may need to defend the 32400 level, since a break below that level may invalidate the outlook in the near term.
Gold advanced by +0.32% ahead of a line-up of Fed speakers today. Bulls may reclaim the 1800.00 level if 1780 near-term resistance is breached. A hawkish outlook by the Fed could see the yellow metal nosedive towards the 1750 level in the short term.