Market focus on US CPI rates for February

Market focus on US CPI rates for February as traders assess inflation trends that could shape expectations for the Fed’s next policy moves and the direction of the US dollar.

February’s US CPI rates front and center

The US dollar remained relatively stable yesterday and during today’s Asian session, as the markets are still focusing on the US war in Iran. Signals seem to remain mixed about a resolution of the conflict, with market worries easing somewhat yet a wide uncertainty still present for market participants.

Today we get the US CPI rates for February and should the release show a resilience of inflationary pressures in the US economy, we may see the greenback being supported as rate cut bets for the Fed may ease.

Support for Aussie widens on rate hike bets

In the FX market, despite some mixed signals being provided the Aussie seems to be standing out, as it is in the greens continuously since the start of the week. Market expectations for RBA’s hawkish intentions tend to feed AUD bulls as the banks’ policymakers are issuing warnings for a possible tightening of its monetary policy should high oil prices push CPI rates higher.

Oil prices stabilise

Oil prices edged lower in today’s Asian session, as the International Energy Agency seems ready for maybe the largest release of oil reserves in its history given the worries for a disruption of oil supply as the war on Iran continues. The intentions of IEA tended to ease market worries further weighing on oil prices. On the flip side, we still highlight that the uncertainty caused by the war could intensify market worries, should the war escalate further which in turn could lift oil prices.

Autres points forts pour aujourd'hui

Today we get Germany’s trade data for January, Norway’s CPI rates for February, the Czech Republic’s CPI rates for the same month, the US existing home sales also for February and later on from the US we get the API weekly crude oil inventories figure. In tomorrow’s Asian session, we get Japan’s PPI rates for February.

Bitcoin remains stable

In the crypto market Bitcoin edged higher yesterday, yet overall the crypto’s bullish intentions remain for the time being unconvincing. Crypto traders continue to keep an eye out for the developments in the war in Iran but also for the release of the US CPI Rates for February today.

On a more fundamental level the discussion of the Clarity Act by US lawmakers is also of interest for crypto traders as should it pass it could enable institutional investors to shift more capital in the crypto market.

Autres points forts pour aujourd'hui

Today we get Germany’s HICP rate for February, and we also note the US EIA crude oil inventories, given the drawdown reported by API yesterday, while ECB’s Schnabel and Fed’s Bowman are scheduled to speak.

Charts to keep an eye out

AUD/USD

AUD/USD was on the rise since Monday and during today’s Asian session broke the 0.7145 (S1) resistance line, now turned to support.

As the pair’s price action broke the upper boundary of its sideways motion since the last days of January and given that the RSI indicator is aiming for the reading of 70, implying a growing bullish market sentiment for the pair, we switch our bias for a sideways motion of the pair in favour of a bullish outlook.

Should the bulls remain in charge of the pair’s direction, we may see it aiming if not breaching the 0.7280 (R1) resistance line. For a bearish outlook to emerge we would require AUD/USD to reverse direction, break the 0.7145 (S1) support line and continue to break also the 0.6940 (S2) support level. 

Dow Jones

Dow Jones remained rather stable yesterday and during today’s Asian session, in the midst of the 48350 (R1) resistance line and the 47150 (S1) support level.

We still are inclined for a bearish outlook of the index, as the RSI indicator remains near the reading of 30, implying a strong bearish market sentiment for the index. 

Should the bears remain in charge of the index’s direction, we may see its price action breaking he 47150 (S1) support line clearly and move lower.

For a bullish outlook, the index has to breach the 48350 (R1) resistance line,, breach the downward trendline which guided the price action since the 11   of February and continue higher to reach if not breach the 49600 (R2) resistance level.

AUD/USD Graphique H4

• Support: 0.7145 (S1), 0.6940 (S2), 0.6800 (S3)
• Resistance: 0.7280 (R1), 0.7455 (R2), 0.7655 (R3) 

US 30 Cash Daily Chart

• Support: 47150 (S1), 45750 (S2), 44580 (S3)
• Resistance: 48350 (R1), 49600 (R2), 50535 (R3) 

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