Dollar Stalls Ahead Of Key CPI Release

The US dollar remains in a holding pattern as investors brace for a week of pivotal events. Markets expect the October Consumer Price Index (CPI) will set at a 0.10% monthly rise.

The US Dollar remains in a holding pattern as investors brace for a week of pivotal events. All eyes are on the imminent release of the October Consumer Price Index (CPI), with expectations set at a 0.10% monthly rise. Economists predict potential moderation in US inflation, citing escalating borrowing costs and subdued consumer demand as contributing factors. Mixed sentiments persist in the US equity market, with energy stocks buoyed by rising oil prices, contrasting with concerns stemming from Moody’s credit rating outlook cut and looming government shutdown risks. On the commodities front, oil prices surge on strategic shifts JP Morgan recommends, while gold rebounds as investors seek refuge ahead of key CPI release. 

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Current rate hike bets on 13rd December Fed interest rate decision: 

Source: CME Fedwatch Tool

0 bps (86.0%) VS 25 bps (14%)  

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Market Overview

Economic Calendar

Market Movements

DOLLAR_INDX, H4

The US Dollar remains stagnant as investors grapple with uncertainty, awaiting crucial events this week. All eyes are on the upcoming release of the October Consumer Price Index (CPI), where expectations are set for a 0.10% monthly rise. Analysts are anticipating a potential moderation in US inflation later this year, attributing it to escalating borrowing costs and subdued consumer demand.

The Dollar Index is trading lower following the prior retracement from the resistance level. MACD has illustrated increasing bearish momentum, while RSI is at 46, suggesting the index might extend its losses toward support level since the RSI stays below the midline. 

Resistance level: 106.10, 106.75

Support level: 105.40, 104.80

XAU/USD, H4

Gold prices experience a rebound as investors seek shelter amidst market uncertainties leading up to the CPI data release. Additionally, attention is focused on the US-China summit between Presidents Biden and Xi. There’s optimism that a successful meeting could bolster risk appetite in financial markets, potentially influencing the appeal of gold.

Gold prices are trading higher following the prior rebound from the support level. MACD has illustrated increasing bullish momentum, while RSI is at 43, suggesting the commodity might extend its gains since the RSI stays rebounded sharply from the oversold territory. 

Resistance level: 1965.00, 1985.00

Support level: 1940.00, 1915.00

EUR/USD，H4

The Euro experiences a subdued performance as a lack of catalysts from the European region leaves investors searching for a clearer market direction. Traders in the EUR/USD pair turn their attention to the impending US CPI data release for potential trading signals. Additionally, investors keenly monitor signals from the European Central Bank for further insights into the euro’s future movements.

EUR/USD is trading higher following the prior rebound from the support level. MACD has illustrated increasing bullish momentum, while RSI is at 56, suggesting the pair might extend its gains since the RSI stays above the midline. 

Resistance level: 1.0765, 1.0835

Support level: 1.0665, 1.0530

GBP/USD，H4

Pound Sterling sees upward momentum as investors assimilate robust GDP data exceeding expectations in the UK. Simultaneously, heightened inflation in the UK, surpassing levels in other major economies, positions the Bank of England with a potential opportunity to consider further tightening of monetary policy.

GBP/USD is trading higher following the prior rebound from the support level. MACD has illustrated increasing bullish momentum, while RSI is at 57, suggesting the pair might extend its gains toward resistance level since the RSI stays above the midline. 

Resistance level: 1.2305, 1.2415

Support level: 1.2205, 1.2060

Dow Jones，H4

The US equity market maintains a flat trajectory amid mixed sentiments. Positive momentum is observed in energy stocks, driven by the upswing in oil prices. This is counterbalanced by Boeing’s notable ascent following a substantial $52 billion order from Emirates. Tesla also experiences an aggressive surge, stimulated by updates to the terms of its agreement with future Cybertruck buyers. However, Moody’s credit rating outlook cut, and the looming risks associated with a potential government shutdown collectively contribute to a tempered overall appeal in the US equity market.

The Dow is trading higher while currently testing the resistance level. However, MACD has illustrated diminishing bullish momentum, while RSI is at 68, suggesting the index might enter overbought territory. 

Resistance level: 34670.00, 34935.00

Support level: 33780.00, 33325.00

USD/CAD, H4

The Canadian dollar stages a rebound, propelled by surging oil prices, considering Canada’s prominence as a major global oil exporter. The buoyant economic outlook tied to higher oil prices puts upward pressure on the Canadian dollar, continuing to exert influence on the USD/CAD pair.

USD/CAD is trading lower while currently testing the support level. MACD has illustrated increasing bearish momentum, while RSI is ag 48, suggesting the pair might extend its losses after breakout since the RSI stays below the midline. 

Resistance level: 1.3835, 1.3890

Support level: 1.3790, 1.3760

USD/JPY, H4

The USD/JPY pair experiences significant volatility, initially reaching a yearly high near 152 before undergoing a sharp correction. Persistent rumours of Bank of Japan intervention introduce uncertainty regarding the appeal of the Japanese yen. The absence of a clear stance from the Bank of Japan compounds market concerns, prompting caution among investors, particularly in the lead-up to the US CPI data release.

USD/JPY is trading higher while currently testing the resistance level. However, MACD has illustrated diminishing bullish momentum, while RSI is at 65, suggesting the pair might enter overbought territory. 

Resistance level: 151.70, 152.70

Support level: 150.40, 149.30

CL OIL, H4

Oil prices witnessed a surge in response to JP Morgan’s strategic advice, advocating a shift in investments from bonds and stocks to commodities, specifically oil. Apprehensions surrounding restrictive global monetary policies, potentially leading to demand destruction, weigh on stock markets. Simultaneously, OPEC’s optimistic stance strengthens oil market fundamentals, prompting an upward revision in the 2023 oil demand forecast.

Oil prices are trading higher while currently near the resistance level. MACD has illustrated increasing bullish momentum, while RSI is at 58, suggesting the commodity might extend its gains after breakout since the RSI stays above the midline. 

Resistance level: 78.80, 80.75

Support level: 75.35, 73.35