Equities Tumble as Inflation Fears Mound

Investors Seek Shelter in Safe Havens After Retailers Worn Over High Inflation

The US dollar traded mixed against the other major currencies on Wednesday and during the Asian session Thursday. It gained versus GBP, EUR, NZD, and AUD in that order, while it underperformed against CHF and JPY. The greenback was found virtually unchanged against CAD.

DJIA — Technical Outlook

The Down Jones Industrial Average fell sharply yesterday, after hitting resistance at the downside line taken from the high of April 21st, with the cash index hitting support at 31315 this morning. That barrier is slightly above the low of May 12th, and it is initially marked by the low of March 8th, 2021. With all that in mind, we will stick to our bearish view.

GBP/USD — Technical Outlook

GBP/USD traded lower yesterday, coming back below the key barrier of 1.2410, which acted as a key support on April 28th, and as a key resistance on May 9th and 11th. Overall, the pair is trading well below the downside resistance line taken from the high of March 23rd, which combined with the rate’s return below 1.2410 suggests a negative bias.

As for Today’s Events

Today, during the Asian session, we already got Australia’s employment report for April, with the unemployment rate ticking down to 3.9% from 4.0% as expected, but the net change in employment revealing that the economy added only 4.0k jobs, a slowdown from March’s 17.9k, and a miss of the 30.0k consensus. The slide in the unemployment rate is a positive development, but the employment change figure is not that encouraging. Thus, we don’t believe that this report has affected much the expectations around the RBA’s future course of action.

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