It’s a quiet Monday with the US on holiday and the end of MAY near. The dollar lost some ground as USPCE Price Index and Michigan Consumer Sentiment shows signs of slowing economic activity. Chinese lockdown restrictions have been eased giving a positive outlook for global growth. Commodities rallied early Monday morning as optimism renewed.
CADJPY rallied by +0.46% past 100.20,5 day high. The CAD is getting its boost from China`s easing restrictions which means more supply from Canada. The BoC is meeting for a rate decision on Wednesday and forecasts have priced in a 50bps hike giving the CAD a bullish mood. A retake of 100.56 and 101.19 resistances may be seen in the near term. Traders are to pay attention to JPY’s monthly industrial production, yearly retail sales and jobs\applications ratio due for release tomorrow.
EURCHF rose by +0.93% after the weaker than expected economic data for Switzerland. The KOF leading indicator for May dropped to 96.8 from the 102.3 surveyed weighing down the CHF strength. Bulls bounced off a 1.0250 support and upside gains are capped by the 1.0350 resistance.
A Break above that level may renew bullish interests toward the 1.0500 psychological resistance. Euro remains resilient as investors eye the German CPI data and German Buba President Nagel’s speech later in the New York session.
AUDUSD extended gains by +0.27% early Monday as the Chinese reopening of the economy brings optimism. The risk-sensitive AUD rallied towards 0.7266, a 6-week high after closing above the 0.7100 level on Friday.
A break above that area may see bulls targeting the 0.75400 high. However, downside risks remain if bears reclaim the 0.7000 support and a retest of 0.6850 will be possible.
Brent crude oil added +0.97% as Shanghai eases curbs and businesses are reopening. Trading at $120 per barrel upside gains are challenged by $123 if China’s comeback brightens up. However, if bears take over $115 may be inevitable in the near term.
US oil responded to China’s news by retesting $116.56, an 11-week resistance. A breach of that high may take USWTI futures to $129.58.
European stocks are up as a continuation of their positive mood from Friday. DAX pocketed a +0.40% gain after a retest of 14600 resistance. A break above that level will give up 14928 near-term resistance.
However, a bearish move to 14317 support may be seen in the near term if bulls fail to challenge the level. CAC40 soared by +0.42% breaching the 6557 resistance. Currently trading at 6600 the index may rally up to 6759, a 6-week high. FTSE is up by +0.38% with 7583 as support and 7692 as immediate resistance.
US stock futures gain on China lockdown easing. US 30 gained +0.26% leaving support at 33 225 and faced with a 34 125 resistance. US 500 futures are up by +0.52% with support resting at 4161 and immediate resistance at 4300. US 100 futures were the biggest gainer with +1.00% gains away from the 12 713 level. To the upside, bulls are capped by a 13000 psychological mark.