09 August 2022 – Calm Day Before The CPI Data

The U.S. dollar edged lower in early trades today, embracing a horizontal pattern ahead of the release of the key U.S. consumer inflation data. The Dollar Index traded 0.1% lower at 106.10, dropping further back from Friday’s peak of 106.93, the strongest level since July 28.

Traders will be eying the U.S. consumer price index release on Wednesday, which will influence the next fed decision. However, a large fall in the CPI release could provide sufficient evidence that inflation has peaked to persuade the Fed to relax its aggressive tightening path, and the dollar has edged lower in tight trading ranges ahead of the number.

Technically:

The U.S. dollar index remains holding around 106.00 and moving inside the support range between 105.90 and 106.00 while keeping the uptrend on the daily chart. The index is not seen changing the trend direction unless it traded below 103.80 which is technically far target.

Technical indicators show a possibility for fluctuation and a chance to trade below 105.90 for a short while.

PIVOT POINT: 105.90

SUPPORT	RESISTANCE
106.00	106.50
105.60	106.80
104.30	107.22

Euro (EURUSD)

The common currency traded 0.1% higher against the greenback during the early trades exceeding the level of 1.02200. The pair built an uptrend on the hourly chart while keeping flat direction on the daily chart. The overall trend remains negative and the long-term trend still targeting below the parity level.

PIVOT POINT: 1.02400

SUPPORT	RESISTANCE
1.02100	1.02480
1.01900	1.02800
1.01500	1.02900

Spot Gold (XAUUSD)

Gold prices held on to recent gains on Tuesday as volatility in stock markets ahead of a closely-watched U.S. inflation figure this week drove up safe haven demand.

Spot gold was down slightly at $1,785 an ounce, while gold futures held around $1,801. Both contracts had rallied nearly 1% on Monday, as uncertainty over upcoming U.S. CPI inflation data drove the dollar lower.

U.S. stock markets saw a volatile session on Monday amid a mixed bag of earnings, which drove up safe haven demand. Investors are also caught between the growth and value play, ahead of inflation data later this week.

Technically:

The precious metal remains committed to the downtrend on the daily chart will remain so unless it broke above the channel at 1,800. Meanwhile, the hourly chart shows a slight support above 1,770 but remains indicating a downward movement towards 1,750 once broke below 1,770.

Technical indicators signal an intense fluctuation between 1,770 and 1,778 but both RSI and MACD support the theory of further decline below 1,770.

PIVOT POINT: 1,790

SUPPORT	RESISTANCE
1,770	1,800
1,767	1,810
1,759	1,825

West Texas Crude (USOUSD)

Oil prices pulled back slightly on Tuesday on the latest progress in last-ditch talks to revive the 2015 Iran nuclear accord, which would clear the way to boost its crude exports in a tight market.

Brent crude futures fell 0.1% to $96.51 a barrel, paring a 1.8% gain from the previous session. Additionally, WTI crude futures declined 0.2% to $90.60 a barrel.

Crude markets were dealt a fresh blow by data from China showing that imports grew at a weaker-than-expected rate in July- furthering a trend of slowing demand in one of the world’s largest oil importers.

Technically:

WTI is also trading lower and moving downward due to the lower demand and high sell-off below $89.50 per barrel. However, WTI is trading at the support of 87.50 but indicates a high probability of breaking below towards $85 a barrel unless the sell-off pressure was met with buying force.