US inflation beat expectations as deflationary pressures from low energy and food prices continue their reversal. Despite monthly CPI beating forecasts by 0.1%, the market remains unconvinced as to the possibility of a rate hike in June. Hawkish commentary in response to the data from FOMC members Williams and Lockhart appears to have had little impact on the market pricing of rate hikes this year. The market is currently pricing in a 12% chance of a rate hike in June, up 4% from yesterday.
US stocks took a hit overnight as yesterday’s gains retraced. The S&P500 was down -0.95% while the DJIA fell by 1.02%. European equity performance was mixed with the DAX down 0.63%, while the FTSE gained 0.27%. Performance in energy stocks helped support equity market movements as wildfires in Canada’s oil sands continue to rage. As fire returns to the town of Fort McMurray, producers Suncor and Syncrude have begun evacuations and plant shutdowns. WTI has rallied to $49/bbl while Brent Crude currently trades at $49.40/bbl.
Currency Updates:
Trade EUR/USD Intraday: intraday support around 1.1300.
Pivot: 1.1300
Our preference: long positions above 1.1300 with targets @ 1.1350 & 1.1365 in extension.
Alternative scenario: below 1.1300 look for further downside with 1.1280 & 1.1245 as targets.
Comment: a support base at 1.1300 has formed and has allowed for a temporary stabilisation.
Supports and resistances:
1.1390 ***
1.1365 **
1.1350 ***
1.1312 Last
1.1300 ***
1.1280 ***
1.1245 **
Trade USD/JPY Intraday: bullish bias above 108.65
Pivot: 108.65
Our preference: long positions above 108.65 with targets @ 109.20 & 109.65 in extension.
Alternative scenario: below 108.65 look for further downside with 108.20 & 107.40 as targets.
Comment: a support base at 108.65 has formed and has allowed for a temporary stabilisation.
Supports and resistances:
110.50
109.65
109.20
108.82 Last
108.65
108.20
107.40
Trade GBP/USD Intraday: bullish bias above 1.4420.
Pivot: 1.4420
Our preference: long positions above 1.4420 with targets @ 1.4495 & 1.4530 in extension.
Alternative scenario: below 1.4420 look for further downside with 1.4380 & 1.4335 as targets.
Comment: even though a continuation of the consolidation cannot be ruled out, its extent should be limited.
Supports and resistances:
1.4570 ***
1.4530 ***
1.4495 ***
1.4455 Last
1.4420 ***
1.4380 ***
1.4335 ***
Trade AUD/USD Intraday: turning down.
Pivot: 0.7335
Our preference: short positions below 0.7335 with targets @ 0.7280 & 0.7265 in extension.
Alternative scenario: above 0.7335 look for further upside with 0.7365 & 0.7400 as targets.
Comment: the immediate trend remains down and the momentum is strong.
Supports and resistances:
0.7400
0.7365
0.7335
0.7295 Last
0.7280
0.7265
0.7245
Trade SPI 200 (ASX) (M6) Intraday: caution.
Pivot: 5340
Our preference: long positions above 5340 with targets @ 5415 & 5450 in extension.
Alternative scenario: below 5340 look for further downside with 5302 & 5270 as targets.
Comment: even though a continuation of the consolidation cannot be ruled out, its extent should be limited.
Supports and resistances:
5500
5450
5415
5366 Last
5340
5302
5270
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