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Markets experienced a risk-on sentiment as dollar strength receded at the open of the week. Commodity markets also rallied along with stocks on Chinese optimism. Better-than-expected Eurozone data provided a much-needed silver lining for the economy amidst soaring inflation. Canada will also release Raw Materials Price Index data for November. Investors’ focus shifted to BoJ monetary policy meeting minutes due for release, early Tuesday.
NZDJPY plunged by -0.30% on Monday underpinned by negative New Zealand Consumer data. The Westpac Consumer Sentiment Q4 data fell to 75.6 from a previous 87.6 number. Investors will be closely watching the Trade balance data scheduled for a release later in the day. The Japanese Yen advanced on growing signs of BoJ’s hawkish pivot. The BoJ is expected to maintain rates unchanged at -0.10% early Tuesday morning. The Pair bounced from 86.70, a 7-day low and upside gains are capped by the 87.50 near-term resistance.
AUDUSD rallied by +0.43% as bulls rallied on China reopening optimism. The risk-sensitive currency rallied as China hints at pro-business policies going into 2023. Moreso, Traders should pay close attention to the release of RBA Meeting Minutes early Tuesday morning. The dollar retreated lower at the week’s opening as the focus shifted to US Housing data due for release on Tuesday. Bulls are holding on to gains above the 0.6680 support, a 3-week support and upside gains are capped by the 0.6750 level.
EURZAR slumped by -1.53% on Monday as Ramaphosa won the ANC re-election in a tight race. The South African Rand advanced as Ramaphosa gets a confidence vote amid corruption allegations that could implicate him as President. However, the positive German Ifo Business Climate Index could limit downside pressure on the pair in the near term. The data rose to 88.6 vs 87.4 surveyed strengthening the Euro in the near term. Bulls retreated from a 22-months high at the 18.80 level and a break below the 18.25 level could cause selling pressure towards the 18.00 psychological support level.
European stocks rose on Monday as the German Ifo Business Climate index gives signs of improvement. FTSE100 advanced by +0.34% as bulls find support at the 7300 psychological level. Upside gains are capped by the 7400 level. CAC40 soared by +0.55% from the 6450-support level and near-term bullish targets are at the 6600 level. DAX edged higher by +0.25% and critical levels to watch out for are the 14200 resistance and 13900 support levels.
US stock futures took a breather as dollar strength fades. S&P500 futures rose by +0.48% as the index remains rangebound between 3850 support and 3900 resistance levels. Nasdaq100 futures rallied by +0.56% after bouncing off the 11200-support level and the key resistance level is at the 11500 level. DJIA index futures soared by +0.25% from the 32700 level and a reclaim of the 33000 level could give bulls the 33300 level.
Gold is slightly higher by +0.17% as bulls extend gains from the 1775.00 level on fading Fed tightening sentiments. The yellow metal is capped by the 1800 and 1810 levels and a break above the near-term barriers could cause a further rally towards the 1880 level.
