Global markets remain shaky as investors turned cautious over U.S. House of Representatives Speaker Nancy Pelosi’s trip to Taiwan. This is the first visit by a US House Speaker to Taiwan since 1997. Pelosi landed in Taipei late on Tuesday, and she held a meeting with the president of Taiwan, Tsai Ing-wen, on Wednesday.
"Today our delegation ... came to Taiwan to make it clear, unequivocally, that we will not abandon our commitment to Taiwan and that we are proud of our enduring friendship," Pelosi said.
Meanwhile, China already reacted to Nancy Pelosi‘s controversial trip to Taiwan. Chinese Foreign Ministry spokesperson Hua Chunying tweeted that Pelosi’s visit was a “major political provocation,”. ‘It proves once again that some US politicians have become ‘troublemakers’ of China-US relations,’ - the Chinese foreign ministry said. China also warned airlines operating in Asia to avoid flying in areas around Taiwan where it is conducting military exercises in response to Pelosi’s visit.
Wall Street ended lower on Tuesday driven by the rising tensions between China and the US and the weaker-than-expected US JOLTS job openings report. The June JOLTS job openings reading came in at 10.7 million, a miss of the 11.0 million consensuses estimate and the prior reading of 11.3 million jobs.
Crude oil prices remain under pressure ahead of an OPEC+ meeting later in the day, the Producers are expected to keep output steady. On the other hand, the API inventory data showed that US crude inventories expanded by 2.2 million barrels last week.
In the currency market, the US dollar remains steady as Investors have been buying into the safe-haven currency as global market sentiment remains cautious. The British pound retreats back to below 1.2170 after the release of weak UK service PMI data, the focus now shifted to the BOE's decision tomorrow.
The safe-haven metal struggling to hold the upside momentum after the Hawkish comments from Federal Reserve officials St. Louis Federal Reserve President James Bullard and Cleveland Fed President Loretta Mester. Both of them opened up the possibility of another large rate hike in September.
On the data front, Germany and Eurozone reported better-than-expected service PMI data on Wednesday. Germany Services PMI was revised slightly higher to 49.7 in July and Eurozone services PMI was revised higher to 51.2 in July of 2022 from a preliminary of 50.6.
Moving ahead today, the important events to watch:
US – ISM services PMI: GMT – 14.00
US – EIA crude inventories: GMT – 14.30
Worldwide, more than 577 million people have been confirmed infected and more than 6.4 million have died. The United States has confirmed over 91 million cases and has had more than 1.02 million deaths from COVID-19, the highest total in the world.
Technical Outlook and Review
EURUSD: For today, the resistance for the pair is above 1.0220, any break over targets 1.0250 minimum. On the other side, the immediate support is near 1.0150 and any break will drag the pair to 1.0130 and 1.0100 levels.
The important levels to watch for today: Support- 1.0150 and 1.0130 Resistance- 1.0220 and 1.0250.
GOLD: For gold, the first nearest support level is located at 1758/54. In case it breaks below this level, it will head towards the next support level which is located near 1745. On the upper side, 1775 will act as an immediate and strong hurdle while 1790 will be a critical resistance zone because above this, bulls are likely to dominate.
The important levels to watch for today: Support- 1754 and 1745 Resistance- 1775 and 1788.
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