On Tuesday, the EUR/JPY finished the session with minimal gains of 0.28%. However, as the Wednesday Asian session begins, the JPY appreciates while Asian stocks are set for a lower open. At the time of writing, the EUR/JPY is trading at 137.96.

The financial markets narrative remains the same. A US company reported that its economic outlook looks worse than estimated, adding to recession fears. The US bond market shows signs of an impending recession, with the yield curve inversion between the 2s-10s year bond yields further deepening. Despite the previously mentioned factors, the euro stood tall and edged higher vs. the yen.

AUD/USD bulls have so far committed but the counter trendline resistance is keeping them in check. The following illustrates the price structures on a 4-hour time frame and the prospects of a breakdown of the same for the coming sessions. 

The Federal Reserve will be prepared to hold interest rates "higher for longer" should inflation continue to surprise to the upside, and market pricing will need to adjust accordingly, Fed's St. Louis president James Bullard said on Tuesday who wants rates at 4% by the end of the year. 

NZD/USD is flat on the day, trapped between a familiar support and resistance range on the daily chart as markets await in anticipation of the next major catalyst being the US inflation data. Ahead of the forex roll-over, NZD/USD is trading at 0.6280 and has stuck to a 0.6270 and 0.6302 range so far.  

''The Kiwi starts the day a tad softer amid a lukewarm rebound in the USD DXY, with slightly higher US bond yields denting risk appetite across many bellwether markets,'' analysts at ANZ bank said in the early Asian open note on Wednesday. 

The USD/JPY is almost flat amidst a calmed North American session ahead of July’s US inflation report, which could shed light on further Federal Reserve tightening in the September meeting. At the time of writing, the USD/JPY is trading at 135.12, slightly up 0.14%.

What you need to take care of on Wednesday, August 10:

The American currency extended its weekly decline throughout the first half of the day but managed to recover some ground during the US session. Nevertheless, volatility across financial markets was limited amid lingering US inflation figures.

Market players await the US Consumer Price Index, hoping prices pressure have started receding in July. Still, the core annual reading is foreseen advancing to 6.1% from the current 5.9% level. At the end of the day, speculative interest will rush to price in whatever they believe the Federal Reserve will do with the monetary policy. China and Germany will also publish inflation data ahead of the US figures.

The EUR/USD pair flirted with the 1.0250 level but shed some 50 pips ahead of the close. The shared currency was weighed by headlines indicating that Russia reportedly suspended oil...

WTI is correcting the day's supply and is meeting daily resistance. US CPI data will come on Wednesday and could be pivotal for oil.  The wild card in the energy sector is the Iran Nuclear Deal.

GBP/JPY exchanges hands around familiar levels, above 163.00. From a long-term perspective, the cross is neutrally biased, waiting for a catalyst. The GBP/JPY hourly chart is neutral-biased but tilted downwards as sellers gather momentum, as shown by the RSI.

Gold could depend on the outcome of Wednesday's US CPI data. The current price is a few bucks shy of the golden ratio, 61.8% level. If CPI were to disappoint, then a subsequent break of $1,815 would be significant.

Despite a dismal market mood, EUR/USD edges higher in a choppy trading session. US, Germany, and Italy’s inflation data are eyed on Wednesday. EUR/USD Price Analysis: Range-bound, but US economic data might rock the boat.

The Australian dollar remains heavy and exchanges hands amidst a narrow range. Investors brace for the US Consumer Price Index for July. Better-than-expected Australian business confidence data capped further downside pressures.

The GBP/USD is hovering slightly below 1.2100, in a quiet session. The pair peaked at 1.2130 and then pulled back to 1.2077. The US dollar is mixed as market participants await the July print of the US CPI.

The world oil demand is expected to rise by 2.08 million barrels per day (bpd), down from 2.23 million in the previous forecast, to 99.43 million bpd in 2022, the US Energy Information Administration said in its latest monthly report, as reported by Reuters.

USD/CAD erases some of Monday’s losses and gains some 0.24%. A dampened market mood keeps safe-haven currencies like the greenback in the driver’s seat. Investors brace for US Consumer Price Index for July, with headline inflation estimated to fall.

The greenback is posting mixed results on Tuesdays. Prices across financial markets are moving sideways, ahead of key data. On Wednesday, the July US CPI is due. The annual rate is expected to drop from 9.1% to 8.7%. The numbers will be critical for expectations about Fed’s monetary policy.

“The market needs to decide whether slowing headline is more important than sticky and strong core. The USD remains sensitive to US data surprises”, explained analysts at TD Securities.

The DXY is falling 0.15% on Tuesday. It managed to remain above 106.00. At the same time US yields are modestly higher. The US 10-year yield peaked at 2.81% and returned to 2.79%.

The NZD/USD is moving sideways with immediate support at 0.6270. A break lower would expose 0.6250 and then the last week's low at 0.6210, which if broken should change the short-term bias from modestly bullish to neutral/bearish.

On the upside, a consolidation above 0.6300 should strengthen the kiwi....

The USD continues to show a high correlation to US data surprises, so the Consumer Price Index (CPI) report should signal the direction. Economists at TD Securities will be short-term focused on whether this number shakes resilient risk sentiment, as that will also help inform near-term USD price action. 

The US Bureau of Labor Statistics will release the July Consumer Price Index (CPI) data on Wednesday, August 10 at 12:30 GMT and as we get closer to the release time, here are the forecasts by the economists and researchers of nine major banks regarding the upcoming US inflation print.

Economists expect inflation to have decelerated from 9.1% to 8.7% YoY. Monthly, a modest increase of 0.2% is projected after a leap of 1.3% in June. What’s more, Core CPI is expected to have accelerated from 5.9% to 6.1% YoY, owing to a more modest increase of 0.5% in monthly underlying inflation, down from 0.7% recorded in June.

“With markets generally consolidating, gains through 1.2135/40 will be a stretch for the GBP and we rather look for prices to edge back towards the intraday low for spot around 1.2065.” 

“The broader downtrend in place since the start of the year remains intact which should serve to reinforce resistance in the 1.2175/00 zone.”

 

“We favour selling EUR/NOK into rallies and expect the currency pair to trend moderately lower towards the 9.40 area on a 12-month view.” 

“Strong demand for Norway’s energy products is likely to keep the NOK well supported. The absence of an energy crisis of the sort facing the eurozone should also allow for a moderate downward trend in EUR/NOK.”

 

“After falling sharply from the Friday peak just under 1.30, the consolidation could be seen as a technical pause ahead of another leg lower – a bear flag pattern, in other words.” 

“USD losses below 1.2835/40 should trigger more USD losses through the 1.28 area.”

“Resistance on the session is 1.2875/80.”

 

“Shanghai traders have contributed to the rally in precious metals, adding nearly 12.3k SHFE lots of gold and 11.2k SHFE lots of silver in the last two weeks alone. This has likely exacerbated price action amid a short covering rally. Notwithstanding, price action across global macro points to potential exhaustion of this move, with duration-sensitive assets approaching their trendline resistance once again.” 

“We see signs that the Chinese bid in gold is exhausted, with Shanghai traders starting to liquidate some of their recently added length. In this context, gold prices are flirting with the threshold for CTA short covering, but have thus far failed to sustainably break through key trigger levels associated with a significant buying program, which could point to informed participants on the offer.”