Market Focus

US markets were mixed after the inflation report was not as bad as feared. The Dow Jones jumped 220.3 points, a new record high. The S&P 500 edged higher to 444.70 while the Nasdaq 100 closed with 0.1% lower. The consumer prices jumped 5.4% in July; however, the core inflation, which excluded energy and food, rose by 0.3% last month, less than the expectation of 0.4%.

According to Dallas Federal Reserve President Robert Kaplan, the central band should start tapering its monthly purchases of bonds in October. As the economy and employment become healthier, the fed should be comfortable pulling back on the stimulus.

US President Joe Biden has pledged to wean off the fossil fuels and has called been more urgent. At the same time, Joe Biden’s administration has called Saudi Arabia and its allies to produce and unleash more crude oil onto global markets.

Main Pairs Movement

Crude oil future edged higher on Wednesday after Joe Biden’s administration mentioned that it would not call on US crude oil producers to increase oil output. In the meantime, the administration indicated that the output from OPEC+ is not enough, which might potentially be harming global recovery. As a result, the crude oil price closed at 69.25, up 1.41% on Wednesday.

The Aussie closed higher at 0.73745 amid the concerns of the US inflation report and the resurgence of new variant delta cases. However, the currency pair seems to consolidate in a tight range as the decline of iron- ore prices and the protracted NSW lockdown, according to National Australia Bank.

The precious metal, gold, rose the most in three months as the dollar declined after the US inflation report, easing fears that the Fed might soon pull back stimulus. Gold edged as much as 1.5%, as closed in $1751 on Wednesday.

Technical Analysis

GBPUSD (4-hour Chart)

Sterling caught some aggressive bids during the early New York session and shot to fresh daily tops, around the 1.3870-75 region in reaction to mixed U.S. inflation data. The headline CPI decelerate to 0.5% gains in July from the 0.9% increase recorded in the previous month. Additionally, core CPI, which excludes food and energy prices, rose 0.3% MoM against 0.4% expected and June’s 0.9%. This, along with Fed president comments, weighed on the dollar. For the technical aspect, the RSI indicator rebounds to 51 figures, suggesting neutral momentum. For the moving average side, 15 long SMA indicators turn static movement and 60 long SMA seems slightly downward.

In light of the aforementioned, we still expect this pair will continue slightly to move to the sideway. If the price falls ahead, the first immediate support level will eyes on 1.385 level in short term and 1.38 level follow. If the price could go over the last highs spot which is around 1.395, it will be heading to over 1.4 level.

Resistance: 1.3896, 1.395, 1.4

Support: 1.38, 1.3745

EURUSD (4- Hour Chart)

EUR/USD pair recovered from a fresh low at 1.1705, yet the recovery stalled around the 1.175 thresholds, maintaining the tepid tone at 1.17368 as of writing. On Thursday, June industrial production data will be featured in the European economic docket. Later in the day, the weekly initial jobless claims and producer price index data from the U.S. will be looked upon for fresh impetus. From the technical perspective, the RSI indicator recovered from over sought territory and printed 44 figures, suggesting slightly bearish momentum. For the moving average side, 15 and 60 long SMA indicators are both heading to the negative side.

As mention previously, we expected if the price drop below 1.1755, market momentum would drag it to lower lows that eyes on 1.17. In the day market, we see euro fiber was blocked by critical upper resistance at 1.1755 then turn its head back down slightly. All in all, we expect 1.17 will be the final support level forbid buyers. If breakthrough the 1.17 level, then price will ahead to lower stage.

Resistance: 1.1755, 1.18, 1.185

Support: 1.17

XAUUSD (4- Hour Chart)

Gold clings to strong recovery gains on Wednesday as renewed dollar weakness helped it gain traction in the American session, after released CPI data. As of writing, gold was up 1.4% on the day at $1753. The U.S. dollar index is currently down 0.2% daily at 92.88. At the same time, benchmark 10 years U.S. Treasury bond yields are down 2%. For the technical side, the RSI indicator record 48.5 figures as of writing, suggesting slightly bearish movement but lack of direction. For moving average perspective, 15 long SMA indicator toward it slope to upside momentum and 60 long SMA indicator shows south way momentum.

In light of price action, we see the market rebound from rock bottom days ago to the current stage as market revival from overly sell-side sentiment. If momentum continues toward to downside, the first critical will be in 1730. On up way, we expect 1751 will be strong resistance.

Resistance: 1751.5, 1792, 1830

Support: 1730, 1700, 1682