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Markets wobbled on Thursday as investors takes a cautious tone ahead of the US inflation data. The markets are pricing in a possible inflation pivot from a previous reading of 8.2% to 8.0%. There will be a release of US initial Jobless claims in the New York session. The European economic docket was largely empty on Thursday with investors shifting focus to UK GDP data and German inflation reports. China’s swelling Covid cases and crypto turmoil continue to weigh global sentiment.
NZDUSD slumped by -0.56% on risk aversion ahead of the US inflation report. The US dollar advanced as investors turn cautionary ahead of a slew of US economic data. US CPI data is expected to drop to 8.0% vs 8.2% previous reading. The pair extended a drop from 0.6000 high to a near-term 0.5850 level. A break below that level could trigger further selling pressure towards the 0.5750 level. Traders should pay close attention to Fed members scheduled to speak later in the day.
The EUR gave up -0.83% against the sterling with several factors supporting the sterling. British PM Rishi Sunak is to attend the 38th British-Irish Council Meeting being the first UK leader to do so in 15 years. UK’s Finance Minister Jeremy Hunt will be delivering his fiscal policy statement next week after the release of the country’s GDP data release on Friday. The production sector in Italy slumped to -1.8% in September from a previous print of 2.3% ahead of Germany’s inflation data. The pair is sliding towards 0.8700 and a move below 0.8690 a 4-day low may set targets at 0.8650 and 0.8600. Otherwise, a leg higher may give bulls 0.8870 in the near term.
AUDJPY fell -0.54% from the 94.20 intraday high following RBA Assistant Governor Michelle Bullock’s speech. The Assistant governor says they are still raising rates however she hinted at a possible pause if need be. Dampened risk mood on the day weighed on the risk-sensitive AUD as dollar bids increased. The pair extended a 3-day drop from the 95.00 high and the next critical support is at the 93.00 level.
European stock gains were limited as investor mood was dampened by Crypto turmoil and quarterly corporate results. FTSE100 rose by +0.42% as markets remain rangebound between the 7250 support and 7350 resistance level. CAC40 advanced by +0.30 as bulls continue to hold on to gains above the 6400 psychological level. The next key resistance level is at 6450 and a break above that level could see bulls advance towards the 6600 level. DAX maintained gains at +0.06% as bulls traded between 13750 resistance and 13500 support.
US stock futures traded higher ahead of US inflation data. S&P500 futures recovered by +0.25% after plunging from the 3850 near-term resistance to the 3750 level and a break below that level could trigger further selling pressure towards the 3700 support. Nasdaq100 futures surged by +0.25% and key levels to watch out for are the 11200 resistance and 11700 support level if 11800 fails to hold as near-term. DJIA index futures bulls rallied by +0.16% as bulls find a near-term support at 32500 and upside gains are capped by the 33500 level.
Gold paused rally with the US inflation report in focus. The yellow metal was steady early European session on Thursday as bulls retracted from the 1725 high, a 2-months high. The bulls could extend the rally if the intermediate high is broken, and the next target is at the 1760 and 1800 levels. However, if bears seek the 1680 level, a previous resistance turned support.
