Daily Key points: US GDP rates and Powell in focus

The greenback edged higher against a number of its counterparts yesterday yet the overall picture tended to resemble a sideways movement. On the other hand US stockmarkets dropped with mega tech companies dragging Nasdaq lower in another sign that the rise of US stockmarkets seems to have reached an end for now. Today we note the release of the final US GDP rate for Q1, which has been in the negatives in the preliminary releases at -1.5% qoq on an annualised basis and should the rate be confirmed we may see recession worries intensifying. Such market worries could be intensified further as Fed Chairman Powell is scheduled to make a speech at the ECB central banking Forum today and should the Fed’s intentions be of faster and wider rate hikes, the prospects of the US economy to grow could shrink. It should be noted that US yields were on the retreat yesterday reducing further the support for the USD and should this tendency continue we may see the USD retreating.

The USD index rose yesterday yet the overall picture seems to resemble a sideways movement. We tend to maintain our bias for a sideways movement between the 104.55 (R1) resistance line and the 103.85 (S1) support line given that he main body of the price action has been in that range since the 17 of the month. If the bulls take over we may see the index breaking the 104.55 (R1) resistance line and aim for the 105.45 level. If the bears are in charge we may see the index breaking the 103.85 (S1) support line and aim for the 102.80 level.

Germany’s HICP rates eyed by EUR traders

The common currency tended to gain against the USD yesterday as well as against the GBP during today’s Asian session, yet not the JPY. EUR traders are expected to focus on the release of Germany’s preliminary HICP rate and should the rate accelerate further we may see the EUR getting support as it would increase the pressure on the ECB for a wider rate hike in September, given that a 25 basis points rate hike in July seems to be carved in stone. On the monetary front we note that ECB’s central bank Forum continues to day and we note ECB President Lagarde’s speech and it should be noted that yesterday she seemed to use a more decisive tone for the bank’s fight against inflation. Should she continue to sound hawkish enough we may see the common currency getting some support.

EUR/USD dropped yesterday aiming but not reaching for the 1.0480 (S1) support line. Overall we tend to maintain our bias for a sideways motion of the pair as long as the price action of the pairs remains confined between the 1.0480 (S1) and the 1.0625 (R1) levels. Should the pair actually find extensive fresh buying orders along its path, we may see the pair breaking the 1.0625 (R1) and actively aim if not breach the 1.0735 (R2) resistance level. Should a selling interest be expressed by the market we may see EUR/USD breaking the 1.0480 (S1) line and aim for the 1.0350 (S2) support level.

WTI’s price continues to rise

WTI’s price continued to rise yesterday albeit seems to show some signs of stabilisation at the level of $110 per barrel, as the market seems to maintain worries for a rather tight supply for the commodity. It seems that Saudi Arabia and UAE are unable to raise production levels as they may be reaching maximum capacity, which more or less could increase upward pressures for oils’ price. Also the leaders of G7 have agreed to explore imposing a ban on transporting Russian oil that has been sold above a certain price yet that does not seem to affect oil prices right now. Today, oil traders may be interested in the release of EIA crude oil inventories figure as April released a considerable drawdown yesterday.

USD 인덱스 4시간 차트