There was a risk appetite mood on the market on Wednesday boosted by Chinese data. The dollar suffered selling pressure following yesterday’s miss in CB Consumer Confidence data to 102.9 vs 108 forecasted. The UK economy continues to battle with plunging house prices while the Euro-Area data boost investor confidence. Going into the New York Session, investors should pay close attention to German CPI data, US Crude oil inventories and ISM Manufacturing data.
NZDJPY rallied by +0.96% as risk sentiment improves on China’s recovery. The Chinese economy gained momentum after the relaxation of most of its strict covid-19 curbs as shown by upbeat PMI data from the country. The Manufacturing PMI for Feb rose to 52.6 against a prior print of 50.1 in January while the non-manufacturing PMI was at 56.3 vs 55.0. The Caixin Manufacturing PMI was at 51.6 vs 50.2. In Japan, BoJ’s member Junko Nakagawa indicated that the central bank must keep the ultra-loose policy for the time being until the country’s inflation accelerates. Buyers are challenged by the 85.00 10-week high and may revisit 85.50 and 86.00 in the near term.
EURUSD gained +0.76% ahead of the US ISM Manufacturing PMI and German inflation figures. The EUR has remained resilient after stronger inflation data from France and Spain, and also got a boost from the risk-on mood on the day. Also helping the tone was the German jobs statistics which showed that the number of unemployed people dropped to two thousand vs expectations of nine thousand. The pair traded above the 1.0600 mark and is still biased to the downside if it stays below 1.0800. However, sellers may need to breach the 1.0450 level for stronger momentum to the downside.
The GBP was down -1.02% selling below the 22.00 mark against the South African rand. The plunge came after the release of the Nationwide House price index which tanked -0.5% vs -0.4% surveyed. The Manufacturing PMI in the UK rose to 49.3 against a survey of 49.2. The pair dropped after a rejection at 22.10 and may be challenged by the 21.50 low.
European equities held positive ground as investors’ moods improved. The DAX was up +0.86% after bouncing off 15 200 as 15 600 remains a key resistance to the upside. CAC40 rose +1.08% though it was bound in a 12-day range between 7400 resistance and 7200 low. The UK100 was up +1.00% after a failure to breach the previous day’s low at 7853. Currently, bulls are capped at 7960 5-day resistance, a breach above may give buyers 8000.
US stock futures rose on Wednesday as optimism from China gives a better start to the new month. The Nasdaq100 futures were up +0.79% above 12000 with near-term resistance at 12 200. S&P 500 futures rose +0.50% from 3950 as 4000 remains a challenge to the upside. The DJIA futures gained +0.32% as bulls may target 33200 in the short term.
Additionally, bitcoin appreciated by more than 2% as the dollar weakness buoyed the cryptocurrency. As of 12:03 London time, BTCUSD was trading at +2.64% with a low residing at $23 000 and resistance at $24 000. Further up, bulls may reclaim $25 300, a key resistance to the upside.