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Markets were steady in the early European session as investors await the US inflation data. There will be a release of the US initial jobless claims along with the Federal Budget balance for December. FOMC member Harker and BoE MPC member Mann will be speaking later in the day. Japanese Yen was the biggest gainer as BoJ speculation strengthens sentiments of policy normalization.
USDJPY plunged by -1.20% as BoJ speculation prompts traders to price in a policy tweak in the near term. The US dollar was downbeat ahead of US jobs data and key inflation data. The US CPI data is forecasted to drop to 6.5% from the previous 7.1%. The pair dropped lower towards the 130.00 level and a break below that level could trigger further selling pressure towards the 126.50 level. On the upside, the pair is capped by the 134.500 level.
GBPAUD rallied by +0.17% ahead of BoE MPC Member Mann’s Speech. The pound advanced on Thursday as investors shifted their focus to the UK GDP data due for release early Friday morning. The Australian dollar lagged despite better-than-expected economic data. The Trade balance rose to 13.201B against 10.500B surveyed. Upside gains are capped by 1.7700 and bears could be interested in the 1.7500 level.
EURNZD edged higher by +0.30% following a release of the ECB economic bulletin. The ECB doubled down on a 2% inflation target reviving the sentiments of a further tightening by the central bank. The New Zealand dollar remained under pressure ahead of the Chinese Trade data due for release early Friday morning. The bulls are challenged by the 1.7000 level and a break above that level could strengthen the outlook towards the 1.7100 level. 1.6800 level is a near-term support level.
European stocks rally as corporate earnings seasons take centre stage. FTSE100 edged higher by +0.31% and upside gains are capped by the 7800 level. If 7700 continues to hold as a near-term support, bulls could make a fresh high above the 7800 level. CAC40 rallied by +0.82% towards the 7000 level, a 1-year high and a break above that level could trigger buying pressure towards the 7380 level, an all-time high. DAX soared by +0.19% as bulls reclaim the 15000 near-term resistance. A failure to break above that level could cause selling pressure towards the 14900 level.
US stock futures steady ahead of key inflation report. S&P 500 futures were down by -0.10% as bulls shy away from 4000 near-term resistance and a break below the 3900 could trigger bearish pressure in the near term. Nasdaq100 futures were slightly lower by -0.13% as bulls struggled to hold above the 11400 level. Upside gains are capped by the 11450 level. DJIA index futures was neutral trading at -0.01% and key levels to watch out for are the 34000 level, at the upside and 33700 support at the downside.
Gold rallied by +0.55% on the softer dollar as investors eye the US inflation report release later in the New York session. The yellow metal is currently trading above the 1880 resistance level and holding above that level could cause bulls to rally towards the 1900 level. On the downside, a break below 1870 could give Gold a bearish weakness in the near term.
