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Markets were slightly lower on Wednesday as the US dollar assumed strength ahead of US economic data. The EUR and the Pound suffered losses as data signalled slower economic recovery. The RBNZ delivered more than expected as rates hit 5.25%. The RBA governor’s speech helped fuel losses to the Australian dollar as the divergence between RBNZ and RBA begins to widen.
AUDNZD plunged by -0.91% following RBA Governor Lowe’s speech. The AUD was under pressure after RBNZ delivered a 50bps, a more-than-expected hike to 5.25%. Governor Lowe attempted to give investors’ confidence by shrugging off the central bank pause in April suggesting they can embrace further tightening in the future.
The policy divergence between the RBA and RBNZ has caused the pair to trade lower making a fresh 2023 low. The AUDNZD broke below the 1.0670 support level, the next critical support is at 1.0480 if the 1.0600 level fails to hold.
GBPUSD sank by -0.35% early Wednesday ahead of US Jobs data and PMIs. The pound gave in yesterday’s gains despite the UK’s private sector’s sustained recovery. The UK Composite PMIs fell to 52.2 vs 53.1 previously and Services PMI came in at 52.9 vs 52.8 forecasted, showing the data was not as bad as anticipated.
The US dollar recovered ahead of the March ADP Non-Farm Employment Change and Trade balance. Bulls retracted from the 1.2500 level, a 10-month high and a break below the 1.24500 level could trigger further selling towards the 1.2400 level.
EURJPY lost by -0.27% following negative data from the Eurozone. The S&P Global Composite PMI fell to 53.7 vs 54.9 surveyed while German Services PMI fell to 53.7 vs 53.9 anticipated suggesting slow economic growth. The Japanese Yen advanced as risk sentiment receded ahead of Japanese Housing data and Easter Holiday. The pair fell from the 145.40 level and the next critical levels are 143.50 and 142.00.
European stocks were mixed as data signals slower economic recovery. FTSE100 was slightly up +0.30% as the British private sector sustains recovery. Bulls found near-term support at the 7630 level and upside gains are capped by the 7730 level. CAC40 plunged by -0.23% as bulls retract from the 7400 resistance level and the next key support is at 7200. DAX lost by -0.50 extending a drop from the 15700 resistance level and bears could target the 15500 level in the near term.
US stock futures as investors await key US economic data. US500 futures were down -0.27% as bulls slid below the 7100 level, the next critical level is the 4050 level. US100 futures sank by -0.27% extending its 3rd day of losses below the 13100 level and bears could target the 12900 level. US30 futures fell -0.26% following a rejection of bulls from the 33500 level. On the downside, bears could target a 33000 psychological level.
In commodities, gold soared to a 13-month high as the US Jobs data indicated a possible Fed pause. The yellow metal was up +0.10% following a close above the 2000 psychological level. Bulls are currently trading at the 2028 level ahead of US economic data, a break above that level could cause further upside gains towards the 2050 level.
