Anticipates for Today’s U.S. CPI

* The dollar index poised at above 104.00 mark while equity markets ticked higher ahead of CPI.

* Both Gold and Oil prices edged lower on easing Middle East tension.

* BTC prices dropped to below the $70,000 mark with the prospect of halving event in 10 days.

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Fundamental Overview

Ahead of the pivotal release of the U.S. Consumer Price Index (CPI) data today, which is poised to significantly inform the Federal Reserve’s next steps on monetary policy, market dynamics have seen notable shifts. The Dollar Index (DXY), in anticipation, has shown a downward trend, struggling to maintain its position above the crucial 104.00 marker. This slump in the dollar’s strength is further compounded by a drop in U.S. long-term treasury yields, adding layers of downward pressure on the currency.

In the realm of commodities, geopolitical developments in the Middle East, especially the forward-looking statements from Israeli officials about potential ceasefire discussions with Hamas, have markedly altered market sentiment. This wave of optimism has led to a cooling off in gold prices, which had been on an ascending path, and a corresponding dip in oil prices, mitigated by a moderated outlook on supply disruptions.

On the monetary policy front, the Reserve Bank of New Zealand (RBNZ) held its interest rate steady at 5.50%, aligning with market expectations and reaffirming its dedication to containing inflation within its 1% to 3% target range for the year. Absent in the bank’s decision was any hint towards rate cuts, and a decidedly hawkish tone in its monetary policy statement has lent additional strength to the New Zealand dollar, signalling the RBNZ’s ongoing vigilance on inflationary pressures.

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Current rate hike bets on 1st May Fed interest rate decision: 

Source: CME Fedwatch Tool

0 bps (85.5%) VS -25 bps (14.5%)  

Market Overview

Economic Calendar

Market Movements

DOLLAR_INDX, H4

As anticipation mounts for the forthcoming U.S. Consumer Price Index (CPI) data release today, the Dollar Index (DXY) continues its subdued trajectory in the currency markets. This period of anticipation comes as U.S. long-term treasury yields retreat from their recent five-month high, a movement that could temper the dollar’s momentum. However, a backdrop of positive economic data from the United States has sown seeds of optimism, raising the prospect that today’s CPI figures could exceed expectations and, in turn, lend strength to the U.S. dollar.

The Dollar Index has formed a double-bottom price pattern amid lacklustre trading performance, suggesting a potential trend reversal. The RSI remains below the 50 level, while the MACD flows flat below the zero line, suggesting that bearish momentum is overwhelmed. 

Resistance level: 104.60, 104.95

Support level:104.00, 103.65

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XAU/USD, H4

Gold prices underwent a minor retracement in the previous trading session but remain firmly entrenched in a bullish trajectory. This slight pullback occurred as market participants exercise caution ahead of the imminent release of the U.S. Consumer Price Index (CPI) data scheduled for later today. Anticipation for this key inflation indicator has heightened, with traders bracing themselves for potential high volatility in gold prices in response to the CPI announcement. The outcome of the CPI reading carries significant weight as it could shape market expectations regarding future Federal Reserve monetary policy decisions.

Gold prices remain trading with strong bullish momentum, as shown by the momentum indicators. The RSI has been constantly staying in the overbought zone, while the MACD has a higher high pattern above the zero line, suggesting that gold is trading with strong bullish momentum. 

Resistance level:2370.00, 2400.00

Support level: 2330.00, 2300.00

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CL OIL, H4

Oil prices stabilised near the pivotal $85.50 mark after experiencing some volatility in the prior trading session. The market’s outlook on oil has been influenced by recent positive shifts in Middle East geopolitical tensions, which play a critical role in shaping global supply expectations. The anticipation of an ease in supply tightness, owing to these developments, has slightly tempered bullish sentiment in the oil market.

Oil prices are supported at their crucial liquidity zone; a break below this level will be a solid trend reversal signal for oil. The RSI has declined from the overbought zone to below 50, while the MACD is approaching the zero line from above, suggesting the bullish momentum is drastically vanishing. 

Resistance level: 87.90, 89.10

Support level: 83.35, 83.05