AUD/USD remains pressured for the second consecutive day, recently pushed by China inflation data. China CPI, PPI rose more than market forecasts in July. Risk appetite remains dicey ahead of the US inflation data, US dollar traces sluggish yields. Firmer US CPI could joins hawkish Fedspeak to underpin USD run-up.

CHINA JULY CPI +2.7% Y/Y (REUTERS POLL +2.9% ) CHINA JULY CPI +0.5 PCT FROM PREVIOUS MONTH (REUTERS POLL +0.5 PCT) CHINA SAYS JULY FOOD CPI +6.3 PCT FROM A YEAR AGO; NON-FOOD CPI +1.9 PCT CHINA JULY PPI +4.2 PCT FROM A YEAR AGO (REUTERS POLL +4.8 PCT) CHINA JULY PPI -1.3 PCT FROM PREVIOUS MONTH

The gold price is flat in Tokyo as markets await the US inflation data for July that will come out during the New York open. The price has been supported by lower yields and that is supportive because the yellow metal offers no interest. The US 10-year note made a fresh corrective low of 2.746% on Tuesday but they have since recovered to a high of  2.816% but still far below their 52-week range high of 3.497% printed in mid-June 2022. 

China maintains strict control of the yuan’s rate on the mainland.

The onshore yuan (CNY) differs from the offshore one (CNH) in trading restrictions, this last one is not as tightly controlled.

Each morning, the People’s Bank of China (PBOC) sets a so-called daily midpoint fix, based on the yuan’s previous day's closing level and quotations taken from the inter-bank dealer.

GBP/JPY struggles for clear directions, grinds near intraday high of late. Multiple pullbacks from the key SMAs, impending bear cross on the MACD tease sellers. Bulls should remain cautious below descending trend line from late June.

A less-confident break of Descending Triangle has weakened the shared currency bulls. The pair has surrendered the 20-EMA support at 1.0210. Momentum oscillator RSI (14) has shifted back inside the woods.

USD/CAD retreats from intraday high, remains unchanged for the day. Oil prices fail to justify Russian pipeline halt, demand hopes amid recession fears. US dollar tracks yields, hawkish Fed bets ahead of the key US CPI for July.

GBP/USD holds lower ground near the support line of weekly triangle. Bearish MACD signals, sustained trading below the key HMAs favor sellers. Ascending support line from July 21 appears short-term important support.

USD/JPY is witnessing a balanced profile above 135.00 as pre-inflation anxiety hit risk-impulse. The plain-vanilla US CPI may slip to 8.7% whereas the core CPI is expected to advance to 6.1%. Japan’s cabinets re-shuffle to keep the yen bulls on the tenterhooks.

EUR/JPY picks up bids to refresh intraday high near two-week top. US Treasury yields await more clues after regaining upside momentum the previous day. Russian pipeline halt, hopes of no change in BOJ policy despite acceleration in price rise challenge buyers. Japan PPI improved on YoY, inflation data from China, Germany and the US will be important for near-term directions.

NZD/USD is consolidated within a daily range of around 0.6280 with prospects of a move to the ceiling of the channel near 0.6335 but with equal possibilities of a move to the lower boundary near 0.6190. This is known as the barroom brawl where there is little bias one way or the other. With that being said, it could be argued that the bias is to the upside considering the recent break of the trendline resistance. The following illustrates the market structure on both the daily and 4-hour charts. 

We think the market is underestimating the stickiness of US inflation, the Fed's resolve in tackling it, and the necessary tightening required to achieve lower inflation.

US CPI on August 10 may be a critical market catalyst for the next leg of the USD rally should it exceed market expectations.

A Double Top formation near 200-EMA bolstered the downside gestures. Greenback bulls are lacking confidence above the demand zone placed around 0.9500. A drop below 40.00 by the RSI (14) will trigger the downside momentum.

WTI picks up bids to reverse the pullback from weekly high. Energy prices struggle to please bulls as softer weekly API oil inventories battle risk-aversion wave. Russia’s suspension of oil supplies through Druzhba pipeline, hopes of higher demand per US oil refiners, pipeline companies favor bulls. Official Oil Stocks Change from EIA, US/China CPI for July will be crucial for clear directions.

AUD/USD extends Tuesday’s downbeat performance, stays pressured around intraday low. Fears of economic slowdown, pre-inflation anxiety weigh on the risk-barometer pair. Aussie NAB data failed to impress bulls amid downbeat equities, rebound in yields. Firmer China CPI may offer intermediate help but US inflation is crucial amid strong jobs report, hawkish Fedspeak.

GBP/USD is juggling in a 28-pip range as investors await UK GDP data. The BOE is worried over soaring consensus for price pressures. Japan’s administration is eyeing measures to paddle up the labor cost index.

DXY, on the 4-hour time frame, the price is consolidated along a rising support line as markets await US CPI, July. 105.05 is a key structure that guards a significant correction to the downside. On the upside, an area of price imbalance between 106.40 and near 108 the figure could be targetted.

Silver price drops as US bond yields escalate while the US dollar weakens. Sentiment remains fragile, shifting sour since the European equities close. Silver’s price action to remain choppy ahead of the US CPI report.

Late on Tuesday, Bloomberg conveyed comments from JPMorgan Chase & Co. economists suggesting that the Inflation Reduction Act will have “almost no effect” on price growth that’s currently running at the fastest pace in four decades. 

USD/CAD retreats from 21-DMA, reverses the previous day’s corrective bounce. Sluggish MACD, steady RSI hint at further grind towards the south. Monthly resistance line adds to the upside filters, key Fibonacci retracement levels offer extra challenges to bears.

GBP/USD is expecting a downside below 1.2060 as the Fed will keep a hawkish stance intact. Pessimism in UK economic data has weakened the pound bulls. The UK Industrial Production is seldom expected to display an improvement.

EUR/USD remains pressured towards 1.0200 after a two-day uptrend. Firmer US data, fears of more pain for Europe due to the Russian energy crisis join pre-CPI anxiety to tease sellers. Final readings of Germany’s HICP inflation data for July are also important to watch. July month China CPI, PPI could offer immediate directions.

The AUD/JPY advanced on Tuesday, despite a pessimistic market sentiment. From a daily chart perspective, the AUD/JPY is neutral biased, in a narrow range. AUD/JPY Price Analysis: Favors bulls above 94.40; otherwise, a break below 93.90 keeps bears in charge.

Gold price is aiming to recapture its fresh monthly high at $1,800.00 on lower consensus for US CPI. Vulnerable oil prices are responsible for US CPI's downward consensus.  The precious metal is set for a smooth ride as RSI (14) has shifted into a 60.00-80.00 range.