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The markets took a breather on Tuesday following a major selloff on Monday. The positive US economic data underpinned sentiments of further tightening by the Fed at the December meeting. Investors shift their focus to US Trade balance data and, oil supply and demand from EIA’s short-term energy outlook. RBA continues to stick to the tightening path, delivering 25bps early morning.
USDCAD rallied by +0.24% as the dollar holds firmly on upbeat US data. The ISM Non-Manufacturing PMI data rose to 56.5 against 53.3 surveyed, while Factory Order beat estimates coming at 1.0% vs 0.7%. The US dollar advanced ahead of US Trade data due for release later in the New York session. The Canadian dollar was weighed down by falling oil prices ahead of Ivey PMI and Trade balance data. The pair rallied for 4 straight days from the 1.3400 support towards the 1.3650 level, a 5-week high. A break above that level could open the way for the 1.3800 level.
AUDJPY soared by +0.22% as Australia bounces back as RBA sticks to rate hike path. The RBA delivered a 25-bps early Tuesday morning to 3.10% as a step to choke rising inflation. Investors will be closely watching the RBA Rate statement and GDP data due for release later in the New York session. The Japanese Yen was downbeat following a drop in Household spending YoY data. Household spending fell to 1.2% from 2.3% while MoM data came at 1.1% against the 1.5% forecasted. The AUDJPY bulls struggle to hold gains above the 92.00 level following a bounce off the 91.20 near-term support level. A failure to break above the 92.50 level could see bearish pressure towards the 88.00 level, a 9-month low.
GBPNZD plunged by -0.23% following a miss in UK Construction PMI data for November. The Construction PMI data dropped to 50.4 against 52.0 surveyed reviving recession fears. The BRC Retail Sales Monitor jumped to 4.1% against a previous 1.2% but failed to lift the pound as investors remain cautious ahead of the UK House price data on Wednesday. The pair took a breather from the 1.9350 resistance towards the 1.91500 level. Investors will be closely watching the New Zealand Global Dairy Price index.
European stocks slipped lower, despite German Factory Orders lifting the negative global sentiment. FTSE100 was up +0.09% as bulls hold gains above the 7500-support level. Upside gains are capped by the 7600 barriers, however, a break above that level could see bulls target the 7650 level. CAC40 trimmed earlier gains by -0.12% as the index wobbles between the 6700 and 6600 range. DAX plunged by -0.11% extending day two of losses as bears target the 14300-support level. Gains are challenged by the 14550 level.
US stock futures extend selloff as US economic data challenges Fed pause. S&P500 futures dropped by -0.10% to near-term support at the 4000 psychological level. A break below that level could trigger selling pressure towards the 3950 level. Nasdaq100 futures were down -0.04% trading at the 11800 level as bulls faces a strong rejection at the 12000 level. Bears may target 11600 if the 11800 fails to hold. DJIA index futures plunged by -0.11% after breaking below the 34000 level and the critical level to watch out for is the 33500-support level.
Crude oil prices fall ahead of EIA’s short-term energy outlook and API Weekly Crude oil stocks data. Brent crude oil plunged by -1.40% extending a 3-day drop towards the 81.00 level near-term support, as the 89.00 resistance holds. A break below that near-term support could see oil nose-dive towards the 76.00 level. USWTI crude oil stocks sank by -1.46% and critical levels are 83.00 resistance and 73.00 support level.
