Investors weigh Energy Demand ahead of EIA short-term reports Dollar paused drop as investors weigh the Midterm election outcome. Investors maintained a cautious tone as bulls assess Oil market demand. Moreso, a spike in recent Chinese Covid cases continue to dampen sentiment in the near term. BoE MPC member Pill will be speaking later in the New York session following a lineup of ECB members in the European session.
EURJPY traded lower by -0.22% during the European session post-positive Japanese Household Data. The Japanese household spending MoM rose to 1.8% from a previous reading of -1.7% underpinning rising inflation pressure on the BoJ. The Euro remained downbeat as ECB members’ speeches failed to lift sentiment in the near term. The EURJPY bulls retracted from the 147.00 resistance and bears could target the 146.00 support. A break below that level could trigger further selling pressure towards the 145.25 level. Traders should closely watch the release of Japanese Current Account data early Wednesday morning.
USDCAD remained neutral at -0.01% amidst the US midterm elections and EIA’s short-term Outlook release. The dollar paused its recovery as US midterm elections take centre stage as voters consider inflation pressures on their way to the polls. The Canadian dollar could not outweigh the US dollar as plunging oil markets weigh sentiment. There will be a release of the US EIA short-term Energy Outlook in the New York session. The pair continue to suffer selling pressure below the 1.3500 level, a previous support-turned-resistance. The next key target is at the 1.3350 level.
GBPNZD plunged by -0.34% as BRC Retail Sales Monitor missed estimates. The UK BRC Retail Sales Monitor dropped to 1.2% vs the 1.5% surveyed indicating biting higher interest rates on consumer activities. Moreso, New Zealand got a boost after Inflation expectations QoQ rose to 3.6% against the previous 3.1% reading. However, China doubling down on Covid Zero policy remains a major headwind for New Zealand’s gains. The pair gave in gains after hitting the 1.9450 near-term resistance while near-term support is at the 1.9150 level. A break above the near-term high could see bullish interests targeting the 1.9600 level.
European stocks pare earlier losses as investors digest several corporate earnings. FTSE100 extended gains by +0.30% after breaking above the 7250 near-term high and bulls could push further up towards the 7400 level. DAX surged by +0.28% as bullish optimism strengthens after reclaiming the 13500 level. The next key level to watch is the 3900 level. CAC40 remained steady at -0.06% after finding near-term support at the 6400 level, a previous resistance-turned-support and the 6600 level is the next critical level to watch out for.
US stock futures remained consolidated as investors get on the sidelines ahead of US Inflation data. S&P500 futures extended gains by +0.21% marking a 3-day rally from the 3700 support. Upside gains are capped by the 3900 near-term barrier. Nasdaq100 futures surged by +0.31% although price action is capped between the 10900 support and 11050 resistance. DJIA index futures added +0.19% after trading above the 33000 psychological level and the next key level is at the 33500 level.
Oil drifted lower as Chinese Covid cases outweigh OPEC+ cuts sentiment. USWTI traded lower by -1.36% from the 93.50 resistance level and bears could target the 87.80 level. Brent crude oil futures plunged by -1.05% and critical levels to watch out for are the 99.50 high and 94.50 low. Traders will be closely watching the EIA Short-term Energy Outlook.