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Midday Brief
Markets eased the rebound experienced on Wednesday as investors focus on the ECB policy meeting hearing later today on how they intend to shield the economy from the consequences of the Ukrainian war and the mounting inflation.
The results of the meeting are quite unpredictable as a lot of changes have happened since the last meeting, although investors are looking for a softer tone. Keep a close watch on the euro and DAX.
European leaders’ summit begins today and ends on Friday with a press conference, while Russian and Ukrainian foreign ministers will be meeting for a diplomatic negotiation in Turkey later today.
The USD Index eased from Wednesday’s plunge, slightly rising +0.15% ahead of important CPI and Jobless claims for the US due for release later in the New York session.
The index may fill in the price action gap between 97.84 and 97.72, left on March 4 before we see any critical change in market direction. The price is currently sitting on top of the 50-day moving average at a 4-hour chart and a break below that region could suppress the dollar in the medium term.
USDJPY remains resilient to the upside after testing 116.00 high early Thursday. During the European session, the pair shaded some of its gains although bulls may continue to defend upside gains at 115.80 near-term support which coincides with a 50-day moving average on the 1-hour chart.
The EURJPY is currently in a consolidation after a strong rebound for 3 consecutive days. The pair is susceptible to increased volatility during the ECB policy meeting and President Lagarde’s press conference due for release later in the New York session. The price is currently trading at 128.00 and has resistance at 128.50.
The AUDUSD is currently suppressed as commodity prices are retreating from multi-year highs. The AUD is up +0.15% after finding near-term support at 0.7285 and could trade higher if diplomatic resolutions are fruitful. Governor Lowe will be speaking later in the day and traders should pay attention to any policy clues.
European equity markets opened lower ahead of the ECB policy meeting today after a strong rebound on Wednesday. The FTSE100 edged lower -1.18% during the European session and the index is currently sitting at 7100 near-term support. The near-term resistance is at 7236.8 and a failure to break above that area can cause near-term pressure to the downside.
The DAX was down -2.38% and could potentially slide lower to fill in the price action gap between 13206.00 and 12825.00 created on Wednesday 9 March. CAC40 plunged -2.38% and is trading above a 50-day moving average on a 1-hour chart at 6200.00 and a break below that area could give room for further downside towards 6111.3, near-term support.
US Equities markets experienced a sharp rebound on Wednesday, while oil markets whipsawed from multi-year highs after the intervention of government funding budget to ease supply shock.
The Nasdaq100 was up +3.6%, although bulls are capped by 13800.00 near-term resistance. The S&P500 rose +2.57% and closed below 4300.00 near-term resistance. The Dow Jones soared 2.00% closing below the 50-day moving average on a 1-hour chart at 33455.
