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Midday Update
Markets are forecasting a strong US employment report pricing in 490 000 jobs creation in March. Ukraine indicates a continuation of diplomatic talks with Russia later in the day. The Crude oil futures were down as the Biden administration pledges a 180million barrels of oil injection into the market to curb rising energy prices. US allies pledge to join the injection of reserve oil in a fight against inflation.
European inflation rises to a record high as energy prices push inflation to 7% YoY while the UK suffers an energy price shock as the energy price cap gets lifted by 54%. Shanghai’s 4-day lockdown continues to underpin oil demand in the near term.
USDCHF extended gains by +0.19% early European session ahead of critical unemployment data. The pair rebounded from 0.9200 near-term psychological support although bulls are currently capped by 0.9250 previous support turned resistance.
A break above that area may see USDCHF retesting 0.93000 near-term resistance and a failure to break above that area may strengthen bears to target 0.91500, 18 February 2022 low. Traders focus on the upcoming employment data from the US due for release later in the New York session.
AUDCAD opened higher rising +0.43% as the Australian dollar gets a boost from the positive AIG Manufacturing Index and building approvals while the Canadian dollar remains underpinned by falling oil prices.
The pair experienced a strong bullish rebound after finding near-term support at 0.9350 after days of a corrective pattern. A break above 0.9400 near-term resistance may open room for further upside. Investor’s eye Canadian PMIs due for release in the New York session.
EURJPY moved +0.48% after bouncing off near-term support at 134.50, which coincides with a 50-day moving average on the 4-hour chart. The bullish movement remains weighed down by negative EU Manufacturing PMI data for March while EU CPI rises to alarming levels.
A break below 134.500 may cause further downside towards 134.000, however, a break above 135.80 near-term resistance may attract bullish participation targeting 137.00 resistance.
European equities opened higher, with Dax up +0.46% as bulls hold above 14400.00 near-term support. Critical areas to watch out for are the 14800.00 resistance and a break below 14400 may cause bears to target 13920, a 2-week low.
CAC40 gained +0.77% although 6700.00 remains a near-term resistance while FTSE gained +0.18% as bulls bounce from a 7500 critical support.
US Equities closed lower on Thursday ahead of the US employment data. Nasdaq dropped -1.55% as bulls loses stream above 15000. S&P500 was down -1.57% closing at 4530 while the Dow Jones Industrial index closed lower losing -1.56% at 34688.50, with a possibility to go lower.
The US 10-year yields traded higher +3.00% early European session as 2nd Quarter begins with key US payrolls scheduled for release early New York session. The benchmark yield was upbeat as investors are pricing on a possible aggressive tightening policy by the Fed. The labour market data remains a key indicator of how far the fed is likely to tighten policy to curb inflationary pressure.
In commodities, Crude oil futures dropped as President Biden pledged to cushion the oil supply squeeze by injecting 1million barrels/Day. US WTI dropped 2% to 98.28 and is poised to trade lower as OPEC+ emphasized a modest output hike in the near term.
