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Safe haven bids on the dollar fizzled out as risk sentiment dominated following President Joe Biden’s comments dismissing Russia as responsible for the Poland missile attack which killed 2 people. Inflation in the UK surprised the upside as the country is said to be in a recession. Investors wait on Canadian CPI, US Retail Sales, and ECB’s Lagarde’s speech later in the day.
GBPUSD broke out of an intraday consolidation following the UK CPI data release ahead of US retail sales data. Headline inflation in the UK surged to an unexpected 11.1% amid reports that the UK is in a recession while the core figures settled at 0.7% vs 0.6% anticipated monthly.
Looking ahead, the US Census Bureau is set to release retail sales data which is expected to come in at 1.0%, the BoE Governor Andrew Bailey will be speaking along with UK’s Inflation Hearings Report. The pair gained +0.63% trading above 1.1900 as bulls may face resistance at 1.2020 before retesting at 1.2300.
EURJPY rose by +0.87% as risk flows return to the market as geopolitical tensions in Poland get clarified. Speculations have it that missiles that landed in Poland may have been Ukrainian forces trying to counter Russian missiles. Inflation in Italy rose to 11.8% vs the 11.9% anticipated though it surged from the previous 8.9%. The Japanese Tertiary Industry Index slumped to -0.4% from 0.7%. Bulls may reclaim 146.00 and 147.00 when 145.50 is breached. Later in the day, ECB President Lagarde will deliver a speech.
AUDCAD gained +0.11% as it trades cautiously amid geopolitical tensions in Poland ahead of Canadian CPI. Australian Wages Price Index rose to 1.0% in the third quarter ruling out expectations of 0.9%. Later in the day the Canadian inflation data will be due and is expected to remain at 6.9% {YoY}. The bullish momentum may be capped by recovering oil prices on the day while the downside may be capped by 0.8900 resistance-turned-support.
European stocks were mixed as investors maintain a cautious mood ahead of ECB President Lagarde’s speech. FTSE100 rallied by +0.50% although bulls are bound between the 7400 high and 7300 near-term support. CAC40 soared by +0.42% and upside gains are capped by the 6700 level. A failure to break above that level could see bulls correct towards the 6560 level. DAX plunged by -0.96% as bulls pull away from the 14400 level and the 14150 level is the next critical support level to watch out for.
US stock futures are steady ahead of October Retail Sales Data. S&P500 futures were up +0.07% and trading activity is trapped between the 4000 resistance level and the 3950 support level. A break below the near-term support could see the index retrace towards the 3800 level. Nasdaq100 futures were down by -0.21% as 12000 holds as a near-term barrier and 11600 becomes the next downside target. DJIA index futures edged lower by -0.05% as bulls stalled below the 34000 high. Bulls struggle to hold gains above the 33500 level and a break below that could give way to the 33000 level.
Additionally, gold prices firmed on a weaker dollar as safe haven bids fizzled out. US President Joe Biden told allies that the missiles fired are unlikely from Russia. US 10-year treasury yields trimmed gains along with the greenback boosting the precious metal’s confidence. XAUUSD was up +0.14% rising from the 1770 low. The yellow metal may need to keep a number above 1780 to stage a bullish outlook.
