Investors maintain a steady mood on Wednesday as they await key US economic data. The USD maintained gains ahead of Durable Goods Orders and Pending Home Sales. Oil markets rallied as markets priced in a production cut by Saudi Arabia and are paying close attention to crude oil inventories.
GBPZAR plunged by -0.30% as the South African inflation print weighs down bulls. South Africa’s CPI data rose to 7.8% YoY from a previous reading of 7.4% and investors are pricing in on the hawkish outlook. The pound remains under pressure as CBI Industrial Trend Orders slumped to -7 from an expected 3 signalling slowing economic growth. The pair receded from a 20.2000 level and bears may target 20.000 psychological support. However, bulls may need to defend the near-term support for a break above the 20.200 level to be possible.
EURJPY extended its 3-day drop by -0.43% ahead of ECB’s monetary policy meeting account on Thursday. The Euro remains under selling pressure as Eurozone PMI data released on Tuesday triggered growth concerns. The Japanese Yen sustains gains ahead of BoJ Board Member Nakamura’s speech after Tuesday’s Core inflation data rose to 1.8% from 1.5% surveyed. Bears are targeting a 3-week low at 135.00 support and a break below that level could reinforce the bearish outlook towards the 134.00 psychological level.
USDCAD rallied by +0.25% as investors awaited US economic data. The dollar recovered its losses ahead of the Pending home sales and Core Durable goods orders. Canada will also release its preliminary MoM Wholesale Sales data in the New York Session. The pair bounced off a 1.2950 near-term support and a break above the 1.3000 psychological resistance could trigger a rally towards the 1.3075 level.
European stocks edged lower as FOMC member Kashkari signalled caution. FTSE100 plunged by -0.43% extending its 4-day streak of losses toward a 4-week low at 7400. A break below that level will open the way for the 7350 level. DAX rose by +0.04% as bulls defend the near-term support at 13100 and upside gains are capped by 13300 resistance. CAC40 rallied by +0.30% and critical levels to watch are the 6400 resistance and 6300 psychological level.
US stock futures were lower as Jackson Hole worries weigh markets. S&P500 futures were slightly lower by -0.04% as bulls struggle to hold the trend above the 4100 support. However, a break below that level could trigger selling pressure towards the 4000 psychological level. Nasdaq100 futures dropped by -0.12% and a break below the 12800 support could reinforce selling pressure towards the 12500 level. However, upside movement is capped by the 13000 psychological level. DJIA index futures remained steady at -0.05% and critical levels to watch out for are 32800 support and 33200 resistance.
In commodities, Crude oil stocks rallied ahead of the US crude oil inventories release in the New York session. The USWTI crude oil futures sustained a 3-day rally gaining +0.65% on Wednesday. Upside gains are capped by the 95.00 level and a break above that 15-day high could trigger buying pressure towards the 100.00 level. Brent soared by +0.85%, reclaiming the 100.00 level and near-term targets are at the 108.00 level.