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Global markets traded in a cautious and range-bound manner as investors held back ahead of key US inflation data. The US Dollar remained broadly steady, with the DXY hovering below the mid-98.00s, reflecting a pause in directional momentum as traders awaited fresh guidance on the Federal Reserve’s rate path. In the FX space, the Australian Dollar softened amid a firmer US Dollar tone, while AUD/JPY edged lower but continued to find technical support above its 100-day EMA. Elsewhere, EUR/JPY remained elevated near the 183.00 handle as concerns over Japan’s fiscal outlook supported the pair, while USD/CHF consolidated around 0.7950 in line with broader USD indecision.
The US Dollar Index is consolidating just below the mid-98.00s as traders remain sidelined ahead of key US inflation data. Price action reflects a pause after recent declines, with markets waiting for fresh confirmation on the Fed’s rate trajectory.
Geopolitical Risks: Ongoing geopolitical uncertainties continue to provide intermittent safe-haven demand for the Dollar, though conviction remains limited.
US Economic Data: Upcoming US CPI is the primary focus, expected to shape near-term Dollar direction.
FOMC Outcome: Markets remain sensitive to any signal that inflation could delay future rate cuts.
Trade Policy: No immediate trade developments are influencing the Dollar, keeping focus on macro data.
Monetary Policy: Fed officials continue to emphasize data dependency, reinforcing cautious positioning.
Trend: Sideways to mildly bearish in the near term.
Resistance: 98.70 followed by 99.20.
Support: 97.90, then 97.40.
Forecast: A CPI surprise could trigger a breakout, but consolidation is favored ahead of the release.
Market Sentiment: Neutral, with traders reluctant to take strong positions.
Catalysts: US CPI data and follow-up Fed commentary.
AUD/USD remains under pressure as the US Dollar holds firm and rate outlooks diverge. Despite rising domestic inflation expectations, the Aussie struggles to attract sustained demand.
Geopolitical Risks: Global risk sentiment remains fragile, limiting upside for risk-sensitive currencies.
US Economic Data: Stronger US data expectations continue to favor the Dollar over the Aussie.
Trade Policy: China-related trade uncertainty continues to cloud the outlook.
Trend: Bearish to range-bound.
Forecast: The pair may remain capped unless US inflation surprises to the downside.
Market Sentiment: Defensive toward the Aussie.
Catalysts: US CPI, Chinese economic data, and RBA commentary.
AUD/JPY has edged lower below 103.00 but continues to find support above its 100-day EMA. The pair reflects a balance between softer risk appetite and ongoing yield differentials.
Geopolitical Risks: Risk-off flows periodically support the Yen.
US Economic Data: US inflation data indirectly influences global risk sentiment.
FOMC Outcome: Fed expectations impact carry trade appetite.
Trend: Consolidative with downside bias.
Resistance: 103.60, then 104.30.
Support: 102.00 and the 100-day EMA near 101.50.
Market Sentiment: Cautious, with reduced carry demand.
Catalysts: Risk sentiment shifts and BoJ-related headlines.
EUR/JPY is hovering near the 183.00 level, supported by Euro resilience and concerns surrounding Japan’s fiscal outlook. The pair remains elevated despite broader market caution.
Geopolitical Risks: Fiscal sustainability concerns in Japan weigh on the Yen.
US Economic Data: Indirect influence through global risk appetite.
FOMC Outcome: Fed policy expectations shape cross-currency flows.
Trend: Bullish but stretched.
Resistance: 184.00, then 185.50.
Support: 181.80 followed by 180.50.
Forecast: Upside momentum may slow without fresh catalysts.
Market Sentiment: Favorable toward Euro crosses.
Catalysts: Japanese fiscal developments and Eurozone data.
USD/CHF is consolidating around 0.7950 as traders await US inflation data. The pair mirrors broader Dollar indecision, with safe-haven demand for the Franc limiting upside.
Geopolitical Risks: Persistent geopolitical risks support CHF demand.
FOMC Outcome: Expectations of gradual easing cap Dollar rallies.
Trend: Range-bound.
Resistance: 0.8020, then 0.8080.
Support: 0.7900 followed by 0.7850.
Forecast: A decisive break likely awaits CPI confirmation.
Market Sentiment: Neutral to defensive.
Catalysts: US inflation data and global risk headlines.
As markets brace for the upcoming US inflation release, consolidation is likely to persist across major currency pairs. Any surprise in CPI could quickly revive volatility, particularly in USD-linked pairs and high-beta currencies such as the Australian Dollar. Meanwhile, yen crosses remain sensitive to both risk sentiment and domestic fiscal concerns in Japan. With inflation data set to provide a key directional catalyst, traders are expected to stay cautious, keeping positioning light until clearer signals emerge.
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