It was another mixed day for global equity markets.
The US30 came under pressure, but bounced off the 33,720 support level again. Traders are keeping a close eye on the support zone between 33,650 and 33,720 points. A clear break below the former level could spell trouble for the index and pave the way for a correction towards the psychological support level at 33,000.
To the topside, 34,190/34,270 is likely to continue capping the topside until the next big market catalyst comes along to push stocks towards new record highs. Investors are hoping that the ongoing earnings season will do the trick, but high expectations could make things more complicated.
The ECB maintained its dovish stance and the Euro came slightly under pressure during the press conference. However, there were hardly any surprises and the sell-off in EUR/USD was limited to another retest of the 1.20 USD figure, from where the currency pair bounced back. Further gains still seem likely in the near-term, with 1.2080 the next major hurdle. Should EUR/USD see a break above this level, little stands in the way of an extension of the recovery rally towards 1.2240. The Daily RSI has not reached overbought territory yet, hinting that there’s further room to the upside.
A hawkish Bank of Canada boosted the Canadian Dollar. While gains against the US Dollar remained limited, CAD/JPY could be an interesting currency pair to watch should risk appetite stabilize in the coming days. The broad uptrend remains intact, despite the rather weak performance in recent weeks. But that correction could soon come to an end.
The currency pair is testing a key trendline resistance from the April high, and a break above would pave the way for a rally towards 87.25 resistance. Should CAD/JPY overcome this hurdle too, a return to the early April high at 88.30 appears likely.
Bitcoin has yet to recover from its weekend slump and the charts are suggesting that the worst might not be over yet. A test of the psychologically important 50k support level appears to be inevitable and it will be crucial for the short-term direction of the cryptocurrency. A break below 50k could trigger further selling and accelerate downside momentum. More Bitcoin investors would get spooked, and there would be little support until $44,300, where BTC/USD should start finding more buyers again.
Coffee prices continue to march higher and the commodity is currently testing the 78.6 % Fibonacci of the February-April decline. A break above this level would pave the way for another test of the February high around 140.30. The Daily RSI is not hinting at overbought conditions yet, and with the overall uptrend still intact, further gains appear likely in the near-term.
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Tech stocks hit hard as equity markets feel intensifying inflation fears; GBP/JPY marches higher; Sharp price increase has coffee struggling for momentum