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The markets experienced a relief rally on Monday ahead of Central banks meetings. Inflation remains the major focus of the week as investors await central bank guidance. The UK economic data indicated growth in October while the dollar was downbeat ahead of the US Federal Budget Balance for November. Commodity markets dropped as the focus shifted to US inflation data later on Tuesday’s New York session.
GBPUSD advanced by +0.22% as a positive UK GDP boost outlook. The UK GDP YoY data rose to 1.5% against the t 1.4% forecasted while GDP MoM came in at 0.5% vs 0.4 surveyed, boosting the pound in the near term. The Trade Balance for October rose to -14.48B vs -15.65B. The dollar was slightly downbeat as investors priced in a cooler inflation reading from the US ahead of the FOMC policy meeting. Bulls found a near-term support above the 1.2200 level and upside gains are capped by the 1.2350 resistance. Traders should pay close attention to US Federal Budget Balance for November due for release in the New York session.
EURAUD soared by +0.67% at the week’s open as the focus shifted to German Inflation data due early Tuesday morning. The inflation data is expected to remain double-digit at 10.0% ahead of the ECB meeting on Thursday. The Australian dollar dropped as investors closely watch the NAB Business Confidence ahead of key employment data. The pair rallied from the 1.55000 support towards the 1.5600 psychological level. A break above that level key level, the bullish target is at 1.57000.
NZDCAD surged by +0.12% as a plunge in oil markets weighs down the Canadian dollar. The Canadian dollar suffered major losses ahead of BoC Gov Macklem’s speech. Investors are pricing in a rate-high pivot following a 50bps hike last week. The New Zealand dollar advanced although gains are limited as growth worries dominate the market outlook. Traders should closely watch New Zealand Current account data on Wednesday and GDP data due on Thursday. The bulls steadied following a 10-week rally towards the 0.8800 level which coincides with a 10-months high, and near-term support is at the 0.8700 level.
European stocks were mixed as investors take a cautionary stance ahead of Central Bank Data. FTSE100 recovered by +0.25% following 4 days of losses. Bulls found a near-term support and the 7450 level and upside gains are capped by the 7500 psychological level. CAC40 was steady at +0.01% as the index remains range bound between the 6600 support and 6700 resistance. DAX soared by +0.23% and critical levels to watch out for are the 14200 support and 14400 resistance.
US stock futures are steady with US inflation data in focus ahead of FOMC meetings. The S&P 500 futures advanced by +0.22% as bulls continue to hold above the 3900 level. Upside gains are capped by the 4000 level. Nasdaq100 futures edged higher by +0.28% towards the 11750 level as 11500 support continues to hold. DJIA index futures rose by +0.14% after reclaiming the 33500 level and the next key resistance level is at the 34000 psychological level.
Oil extended a 7-day drop on Monday as Traders weigh the global growth outlook. The USWTI crude oil futures plunged by -1.51% as bulls struggle to hold above the 70.00 level and a break below that level could trigger further selling towards the 65.00 level. Brent crude oil lost by -1.56% towards the 75.00 near-term level and the next key level is at the 70.00 level.
