The market is showing a bit of mixed sentiment as investors await the US CPI data release on Wednesday. The inflation figures are expected to be lower than previous which could mean less aggressive tightening by the Fed. The European economic docket is empty today with the focus shifting to German CPI on Wednesday. The EIA will be releasing a short-term energy outlook in the New York session.
AUDCHF is trading -0.45% lower in the European session. The risk-sensitive AUD is suffering selling pressure as risk sentiment looms. The AUD Westpac Consumer Sentiment was unchanged and could not lift the AUD. The CHF unemployment rate came at an unchanged 2.2% for the month of July. The pair is bound by 0.66800 to the upside and bears may target 0.6620 and 0.6600 levels in the near term.
EURJPY surged higher by +0.38% ahead of Eurozone CPI data on Wednesday. The German and Italian CPI is expected to remain the same on a yearly basis. The Yen is losing ground on less demand on a risk-on day. Intraday low resides at 137.200 and further upside rally is capped by 139.00 and 140.00. A break below 137.200 could trigger downside pressure towards 136.00 psychological support.
GBPUSD extended gains by +0.27% for the second day despite light fundamentals ahead of the US inflation data on Wednesday. The dollar remains under selling pressure as the US CPI data is expected to drop from 9.1 to 8.7% shrugging off an aggressive tightening by the Fed. The pair bounced off a 1.2050 level and upside gains are capped by the 1.2150 and 1.2200 levels. Traders should pay close attention to the US Non-farm productivity Q2 data and EIA short-term energy outlook later in the New York session.
European equities are trading on the back foot as investors weigh geopolitical tensions. The FTSE 100 dropped by -0.09% moving between 7500 and 7460. A break above may renew targets to 7600. CAC40 is down -0.42% trading between 6450 low and 6520. A breach of the 6450 low may give bears 6400 in the near term. However, a rally to the upside may give bulls 6600 a 15-weeks high. DAX fell -0.88% from the 13700 level and is sliding towards the 13450 mark. A further decline is capped by 13350 in the short term.
US stock futures were slightly lower weighed by disappointing earnings reports. Nasdaq100 futures were down by -0.35% from the 13400 psychological level capping upside gains. A break below the 13000 level could trigger bearish pressure towards the 12600 a 9-day low.
S&P500 futures trimmed gains by -0.24% and the price is rangebound between the 4150 resistance and 4100 support. DJIA index dropped by -0.21% as bulls lost steam below the 33000 resistance. A breach below the 32400 could trigger selling pressure towards the 32000 psychological level in the near term.
In commodities, gold prices recovered earlier losses rising +0.17% on a weaker Dollar. Traders remain cautious ahead of US CPI data on Wednesday. A softer reading could reinforce a bullish outlook above $1800 as investors price in a Fed rate pivot. A break above $1800 could renew bullish targets to $1820 and $1880. However, bearish targets are at the $1750 level.