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The greenback steadied in the mid-European session ahead of Jerome Powell’s speech. Upbeat data from the French production sector showed that the Eurozone’s slowdown may be gentler than initially expected. Central bank members lined up for speeches today including BoE’s Pill, BoC’s Governor Macklem, BoJ’s Kuroda, and Fed’s Chair Jerome Powell. The Energy Information Administration will release its short-term energy outlook along with API’s weekly crude oil inventories.
USDCHF trimmed early European session losses as traders await the Fed chair’s speech. Later in the day, the Federal Reserve Bank Chair will deliver a highly anticipated speech for more guidance and clarity on further interest rate hikes. The dollar is helped by hawkish comments from fed officials who said they expect the terminal rate to rise to 5% and above to bring down inflation from elevated levels. The pair is currently trading at +0.01% between 0.9196 low and 0.9220 high. A move above may give 0.9260 in the short term while bears may target 0.9100 and 0.8930.
NZDJPY rallied by +0.26% following mixed Japanese data earlier on Tuesday. Household spending in Japan declined to -1.2% from 1.2% every year and -0.9% from 1.1% every month in November. Inflation in Tokyo appreciated in December putting the BoJ under pressure to further tweak their policy soon. China’s re-opening continues to act as a tailwind for the NZD in the meantime. An extended rally may be challenged by 84.70 before we may see targets at 85.00 and 86.50 in the near term.
EURGBP appreciated by +0.17% building on Monday’s gains. The EUR got helped by higher-than-anticipated French Industrial Production which settled at 2.0% in November vs -2.5% in the prior month. The BRC Retail Sales Monitor showed that the sector grew by 2.4% in December although it is expected that spending may slow in 2023. The pair’s bulls kicked off from 0.8800 on the day and are rallying towards 0.8880 resistance. Further up, bulls may reclaim 0.8900 and 0.8980.
European stocks were mixed as investors maintained a cautious mood on the day. The FTSE100 gained +0.30% paring Monday’s losses as the UK realized better than anticipated retail sales data in December. The index rose from 7665 and may target 7900. FRANCE 40 tanked by -0.24% from 6890 as targets remain at 6800 on the downside. The German 40 was flat at -0.03% bound in a tight range between 14673 and 14763.
US stock futures were slightly lower ahead of Fed Chairman Powell’s speech. S&P500 futures were down by -0.20% as bulls lose steam below the 3900 resistance and on the downside, bears may target the 3800 level. Nasdaq100 futures edged lower by -0.17% from the 11300 level and 10700 is the next key support level if bears break below the 11000 psychological level. DJIA index futures lost by -0.32% and key levels to watch out for are the 33700 resistance and 32800 support levels.
Gold ticked higher as investors pay close attention to the Fed for market guidance on interest rates. The yellow metal was up +0.20% trading near the 1880 level, an 8-month high and a failure to break above that level could see a corrective pattern towards the 1800 level. However, a break above the near-term high could give bulls the 1900 level.
