Vikram Murarka
Kshitij Consultancy Services
US CPI data came in softer than expected, surprising the markets and leading to sharp depreciation in the Dollar Index against major currency basket. The Dollar Index and Euro may extend to 103 and 1.0950 if current momentum is intact else may face reversal over the next few sessions. EURJPY continues to remain bullish towards 165/166. USDJPY is holding below resistance at 152 and could bounce from 150. Failure to bounce from 150 can drag it towards 148. Aussie has risen sharply from 0.6350 itself and could trade within 0.6350-0.6550. Pound could decline from 1.2550/1.26 in the near term. USDCNY is bearish towards 7.22/20 while below 7.28/30. USDRUB can bounce from 90/89 towards 93/94 else a break below 89 is needed for further bearishness. EURINR can be bullish towards 91/92. USDINR should fall below 83.10 today on strength in the Euro and Chinese Yuan but we need to see if the RBI allows the fall to happen.
The US Treasury yields have come down sharply after the inflation data release yesterday. The US Headline CPI rose 3.23% (YoY) in October, down from 3.69% a month ago. The Core CPI rose 4.02% (YoY) down from 4.13% over the same period. Key supports are coming up for the yields which can be tested. The price action thereafter will need a close watch for a reversal. The German yields have declined sharply and have more room to fall from here. The 10Yr GoI remains vulnerable to fall while it remains below its immediate resistance. The 5Yr GoI looks mixed and can oscillate in a narrow range.
Dow Jones looks bullish for the near term. DAX has surged above 15500 and a further rise above 15650 is needed to negate our bearish view. Nifty can rise back taking cues from the global markets. Nikkei has entered into the crucial resistance zone and can witness a fall if that holds well. Shanghai has risen back as the support at 3025 held well and looks bullish to target further highs.
Brent and WTI have come down after facing their immediate resistance at $84 and $80 respectively and while below these resistance, prices can dip further. Gold, Silver and Copper have surged after the release of lower than expected US CPI which came in at 3.23% for Oct-23 than market expectation of 3.78%. Natural Gas is to remain ranged while below 3.30.
Visit KSHITIJ official site to download the full analysis
The above views are based on the latest available information. Though the information sources are believed to be reliable, the information is not guaranteed for accuracy. While the views are proffered with the best of intentions, neither the author, nor the firm are liable for any losses that may occur as a result of any action based on the above. World financial markets, and especially the Foreign Exchange markets, are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved.
Recommended Content
Editors’ Picks
EUR/USD holds above 1.0800 ahead of Eurozone GDP, US inflation data
EUR/USD stays in positive territory above 1.0800 after registering its highest daily close in over a month on Tuesday. Investors await first-quarter GDP data from the Euro area and April Consumer Price Index data from the US.
GBP/USD closes in on 1.2600, all eyes on US CPI data
GBP/USD continues to stretch higher toward 1.2600 early Wednesday after closing in positive territory on Tuesday. The US Dollar struggles to find demand and allows the pair to hold its ground ahead of April CPI and Retail Sales report.
Gold consolidates gains near $2,360 as focus shifts to US CPI
Gold holds steady at around $2,360 in the early European session on Wednesday after gaining nearly 1% on Tuesday. The benchmark 10-year US Treasury bond yield stays in the red below 4.5% ahead of US inflation data, helping XAU/USD keep its footing.
Ethereum bears attempt to take lead following increased odds for a spot ETH ETF denial
Ethereum is indicating signs of a bearish move on Tuesday as it is largely trading horizontally. Its co-founder Vitalik Buterin has also proposed a new type of gas fee structure, while the chances of the SEC approving a spot ETH ETF decrease with every passing day.
US CPI data expected to show slow progress towards 2% target
The US Consumer Price Index is set to rise 3.4% YoY in April, following the 3.5% increase in March. Annual core CPI inflation is expected to edge lower to 3.6% in April. The inflation report could influence the timing of the Fed’s policy pivot.