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Commodities rallied in the early European session on Tuesday as China’s easing of lockdown restrictions improved optimism amidst recession fears. The energy sector took a lead as the UAE energy minister indicated there would be a limited output hike from the country. The G-7 summit continues today while Central banks are expected to speak throughout the day.
AUDUSD is up +0.44% on a weaker Dollar. The Dollar is weaker today despite positive Pending Home sales at 0.7% and Core Durable Goods orders data at 0.7% released on Monday. The Chinese optimism on lockdown easing boosted the AUD as a bigger importer of Australia’s exports. The AUD’S Retail Sales data for Wednesday is surveyed to be 0.5% less than the previous limiting upside gains. The pair’s intraday support resides at 0.69200 and upside traction is capped by 0.69600, a 3-day high and a break above that could open the way for 0.70000 and 0.70700 levels. Looking ahead the US CB Consumer Confidence for June is expected to drop to 100.4 weighing down the Dollar.
GBPCAD extended its bearishness by -0.37% in the European session. The CAD is stronger on higher oil prices as Libya and Ecuador are limiting oil production and rising demand for the black liquid. The G-7’s agreement to put a price cap on Russian oil has lifted oil prices as well boosting CAD strength. The pair is capped by 1.5800 resistance and bears may target 1.56546 if they manage to break below the 1.5700 support. Market participants shift their focus to BoE’s Cunliffe speech today and Governor Bailey’s speech tomorrow.
EURJPY soared by +0.55% during the European session. GfK German Consumer Climate rose to -27.4 against -27.6 surveyed. President Lagarde’s speech was hawkish as the central bank prepare to exit a neutral policy stance. The pair climbed to a 144.20, a 7-year high and a break above that level could reinforce bullish momentum towards the 145.00 psychological barrier. Traders shift their focus to the Japanese Retail sales early Wednesday morning.
European stocks rallied as the energy sector leads amid China eases lockdown restrictions. FTSE100 soared by +1.15% and bulls broke above the 7330 resistance, a 12-day high. Upside gains are capped by 7400 psychological resistance. DAX rose by +0.57% despite struggling to hold gains below the 13450 near-term resistance. Critical areas to watch out for are the 13125 support and 13000 psychological level. CAC40 surged by +1.23% as the price attempted to fill in a price action gap between the 6136 and 6200 levels. If bulls manage to hold gains above the 6000 psychological support, further upside gains are to be realised.
US stock futures struggled to keep gains as yields rallied. S&P500 futures were up +0.34% pre-bell as bulls target the 4000 psychological barrier. Near-term support is at 3800. Nasdaq 100 futures edged higher by +0.13% and gains are capped by 12200. A break above the near-term high could reinforce bullish interest toward the 12800 level. DJIA Index gained +0.42% after bulls managed to reclaim the 31000 psychological resistance. The next critical barrier is the 32000 level.
US treasury yields soared ahead of the $40 billion 7-year note auction. The US 7-year yield extended gains for the 3rd session by +1.28% as bulls managed to stay above the 3.15%. A break above the 3.40% near-term resistance could reinforce the bullish outlook toward the 3.60% 14-year high. US 10-year yield rose by +1.59% with near-term resistance at 3.50% and support at 3.00%.
