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MTrading Team • 2022-11-10

EURUSD wobbles near monthly high amid cautious optimism ahead of US CPI

EURUSD wobbles near monthly high amid cautious optimism ahead of US CPI

Global markets prepare for the US inflation data amid mixed concerns and portray the anxiety by limiting the moves inside a stipulated range. 

The latest comments from various central bankers and expectations of a softer US CPI allow the US stock futures to print mild gains while the US Treasury yields remain pressured.

With this, the US dollar remains volatile and tried to extend the previous day’s gains, but fails repeatedly, whereas the commodity prices grind higher. Gold and EURUSD, in particular, jostle with the key moving averages whereas crude oil refreshes a two-week low.

BTCUSD and ETHUSD both try to consolidate heavy losses around yearly lows, marked due to the FTX fiasco, amid the US dollar’s struggle to extend Wednesday’s gains.

Following are the latest moves of the key assets:

  • Brent oil prints a three-day downtrend while late October lows near $93.60, down 0.15% intraday at the latest.
  • Gold extends Wednesday’s losses to $1,706 by the press time, down 0.05% intraday.
  • USD Index struggles to defend the latest rebound near 110.50, up 0.05% intraday as we write.
  • Stocks in Europe and the UK are mildly offered even as Wall Street marked notable losses and snapped a three-day uptrend.
  • BTCUSD and ETHUSD print the biggest daily gains in a week as bears lick their wounds around the yearly low.
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A typical pre-data sentiment exists

Despite the latest rebound in the US dollar, the market portrays indecision in general. The moves could be linked to the trader's hope of softer US CPI and the policymakers’ readiness for easy rate hikes. However, it all depends upon how weak the price pressure will be and the fears of an upside surprise keep the greenback buyers worried.

Gold stays depressed as the US dollar rebound joins China’s covid concerns whereas higher oil inventories and demand woes keep Brent oil down. Further, EURUSD hesitates in its latest rebound as it pokes the key hurdle to the north whereas the USDJPY fails to decline amid BOJ’s defense of easy money policies.

FTX's fiasco dragged the cryptocurrencies toward the yearly low before marking the latest rebound. The recovery moves, however, remain doubtful amid looming concerns over regulations and less participation due to the recently downbeat trust in these assets.

Elsewhere, equity bears returned the previous day but are likely stepping back while waiting for the US inflation numbers. The reason could also be linked to mixed comments from the global central bankers.

⏫ 🟢 Strong buy: USDJPY

⏬ 🔴 Strong sell: ETHUSD

⬆️ 🟢 Buy: USD Index, USDCAD, Nasdaq, EURUSD

⬇️ 🔴 Sell: DAX, FTSE 100, gold, BTCUSD, AUDUSD

Nothing more important than US CPI

Although much second-tier data from Europe and the US could entertain traders, US CPI is the key amid upbeat expectations. In addition to the headline figure, which is expected to ease to 8.0% from 8.2%, the core CPI will also be watched closely as Fed policymakers hint 50 bps rate hike in December.

As the markets are all-in for a downbeat CPI figure, any upside surprise will be reacted fiercely and hence the event should be traded with great caution.

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