US stocks rose on Monday even as investors remained concerned about the Federal Reserve and the fact that the American economy was slowing. The Dow Jones rose by 53 points while the tech-heavy Nasdaq 100 index rose by over 232 points. The Fed is expected to maintain a hawkish tone after recent positive jobs numbers from the US. On Friday, data showed that the American unemployment rate dropped to 3.6% while wages rose by more than 5%. But on Monday, data revealed that the country’s factory orders declined by 0.5% in February after rising by 1.5% in January. New orders for non-defense capital investments fell by 0.2% as supply chain challenges rose.
The price of natural gas hovered near its highest level this year while oil moved sideways after Emmanuel Macron called for a complete ban of Russian oil and coal. He attributed the statement to signs that the Russian military had committed war crimes in Ukraine. Still, he did not call for a ban of Russian gas, which is an important part of the European economy. Russian gas accounts for about 80% of all Austrian gas imports and 40% in Germany. Still, investors are pricing in a sharp decline in Russian gas in Europe since the EU has said that it will not pay in Rubles. Russia supplies about 70% of thermal coal to Europe.
The biggest event on Wednesday was the interest rate decision by the Reserve Bank of Australia (RBA). As was widely expected, the bank left interest rates unchanged at 0.10%. It then hinted that it would start hiking interest rates in the coming months. Meanwhile, Japan released relatively weak household spending and cash earnings data. The upcoming numbers that will move specific currencies, will be Canada’s exports and imports and the latest services and composite PMIs from most countries. The American Petroleum Institute will release the latest oil inventories data.
EURUSD
The EURUSD pair declined to a key support level at 1.0985, which was the lowest level since March 29 this year. The pair managed to test the important support that is shown in red. It also dropped below the 25-day moving average while the Relative Strength Index moved slightly above the oversold level. The price is also below the dots of the parabolic SAR indicator. Therefore, the pair will likely keep falling today. The alternative is where it resumes the bullish trend as bulls target the upper side of the channel.
USDCAD
The USDCAD pair was little changed on Tuesday morning. It is trading at 1.2492, where it has been in the past few days. The pair has moved below the 25-day moving average and the important support at 1.2585, which was the lowest level on March 3. The Williams %R has also moved below the overbought level. Therefore, the pair will likely keep falling as bears target the next support at 1.2430, the lowest level in March.
XNGUSD
The XNGUSD pair rose to a high of 5.89, which was the highest level since November 2. On the daily chart, the pair is along the upper side of the ascending channel. It has also moved above the short and long-term moving averages while the MACD has continued rising. Therefore, the path of the least resistance for the pair is to the upside.
