Investors takes a cautionary route ahead of US Inflation data

Midday Update

The Dollar index remains rangebound ahead of US Consumer Price Index data due for release early New York Session. The CPI will also be accompanied by Initial Jobless Claims which will set a critical tone regarding the timing of interest rate cycle for the Federal Reserve Bank.

The US index outlook is capped by the 95.70 resistance and 95.30 near-term support zone, which indicates investor’s cautionary stance inside this tight range ahead of the mentioned US CPI data drop.

The European commission raised 2022 inflation forecast to 3.5% from 2.2% as reported by Reuters early Thursday. However, the impact of the news seems insignificant to the current EURUSD price action as the pair remain steady between 1.1480 resistance and 1.1400 near-term support.

Mixed outcome from the US inflationary data could push the current trend higher towards 1.1500 area in the near-term. However, according to technical analysis the short-term trend is definitely bullish right now.

The sentiment on the European Stocks remains dampened as major indexes remain rangebound. The FTSE gained 0.1% during European open, while CAC40 being the biggest looser at -0.50% after failing to break above 7150 near-term resistance.

The US stocks closed higher late Wednesday as tech stocks fuelled a rally after positive quarterly earnings. The Nasdaq was the biggest mover gaining 2.10% and filled up February 2-3 gap, reclaiming $15 000 area.

In terms of the overall trend, is at a critical pivot amidst uncertainties surrounding the US inflation data and interest rates, and of course Ukraine, which could cause a huge negative shock at any time.

The AUDUSD turns bullish in the near-term, as the pair manages to break above the 200-day moving average on 4hour chart. The bullish trend could be invalidated if price fails to hold above 0.7150 and the AUDUSD could give in its weekly gains.

Rising Inflation expectations also influences the New Zealand Dollar in the near-term and bulls could push for further gains towards 0.67500 resistance. On Wednesday, the price breached a critical resistance zone at 0.6800 and the closest barrier to the upside coincides with a 50-day moving average on the Daily Chart.

The GBPJPY extended gains during European session as bullish outlook points towards 157.77 high. The possibility of the pair revisiting this 3 months high comes at a time when BoJ governor Kuroda makes remarks that the central bank is going to maintain a status quo on monetary policy as possibilities of a jump in inflation statistics are minimum. Bank of England governor Bailey will be speaking later in New York session and potential hints on policy issues could cause short-term effect on the pound pairs.

On commodity markets, gold remains steady ahead of US inflation data. The Yellow metal price action indicates potential to reclaim 1850.00 amid US inflationary pressures. A failure to break above that near-term resistance could cause the asset to suffer loses towards 1810 area.