The king dollar hit a six-year high against the Japanese yen on Tuesday, at 120.90. The strong recent strong upside momentum was boosted after the U.S. Federal Reserve hinted at further raising its key interest rate. On Monday, Fed Chair Jerome Powell said that he would be open to a 50 bp hike if conditions warranted it.
“If we conclude that it is appropriate to move aggressively by raising the federal funds rate by more than 25 basis points at a meeting or meetings, we will do so.” – Powell said.
European shares started today slightly higher while the overall momentum remains mixed as the Russia-Ukraine war as ongoing peace talks failed to progress. On the other hand, the investors are waiting for the speech from ECB President Christine Lagarde. On Monday, Lagarde said - “In the short, medium-term, it will be of an inflationary nature. Whereas in the long term, forces on prices will be rather deflationary, she said.
Crude oil futures retreat from the early session highs. During the early morning session, the oil futures climbed to a fresh weekly high as the EU is discussing a wide ban on the purchase of Russian oil. Moving ahead, the oil traders should closely monitor the release of API crude inventories data.
In the currency market, the EURUSD remains under pressure following the comments from the European Central Bank (ECB) Vice President Luis de Guindos. Meanwhile, the US Dollar was boosted by surprisingly hawkish comments from Federal Reserve Chair Jerome Powell that lifted Treasury yields across the curve.
The safe-haven metal struggling to find the upside momentum. The metal dropped to a fresh session low of $1921.50 on Tuesday morning driven by the strong US dollar. At the time of writing, the precious metal trades were above $1928.
Worldwide, more than 470 million people have been confirmed infected and more than 6.09 million have died. The United States has confirmed over 79.7 million cases and has had more than 970,000 deaths from COVID-19, the highest totals in the world.
Technical Outlook and Review
EURUSD: For today, the pair is supported at 1.0950 level, any break below this level will open the doors to 1.0930 and 1.0900. On the flip side, if the euro breaks above 1.1030 it would open doors towards the next resistance area of 1.1070.
The important levels to watch for today: Support- 1.0950 and 1.0930 Resistance- 1.1030 and 1.1070.
GOLD: The key resistance is located above $1940, a break above this level will confirm a possible move to $1955. On the downside, if the metal loses the $1920 handle, then we expect a move toward $1912/08.
The important levels to watch for today: Support- 1920 and 1912 Resistance- 1932 and 1940.
Quote of the day - Volatility is greatest at turning points, diminishing as a new trend becomes established – George Soros.