Downside momentum is indicating that the DXY will re-visit its six-week low at 104.64. The odds of a Fed rate hike will remain steady while the hawkish guidance will trim abruptly. A meaningful decline in the US CPI has underpinned risk-sensitive assets.

US inflation expectations, as per the 10-year breakeven inflation rate per the St. Louis Federal Reserve (FRED) data, dropped to the lowest levels in two weeks after the US Bureau of Labor Statistics released downbeat figures of the US Consumer Price Index (CPI) for July on Wednesday.

That said, the inflation precursor dropped to 2.43% by the end of Wednesday’s North American session.

Following the US inflation release, US President Joe Biden said on Wednesday that they are seeing some signs that inflation may be moderating, as reported by Reuters. "We could face additional headwinds in the months ahead," Biden added. "We still have work to do but we're on track," adds US President Biden.

“After Wednesday's CPI report, traders of futures tied to the Fed's benchmark interest rate pared bets on a third straight 75-basis-point hike at its Sept. 20-21 policy meeting, and now see a...

EUR/JPY remains pressured towards short-term key SMA after declining the most in more than a week. Downside break of the one-week-old support line keeps sellers hopeful. 200-SMA, descending trend line from late June adds to the upside filters.

WTI crude oil struggles to keep the US inflation-linked bullish bias. Resumption of Russian oil pipeline flows after six-day halt challenges US CPI-led advances. EIA inventory build, Fedspeak and challenges to risk profile also exert downside pressure on the oil prices. Monthly demand forecasts from OPEC, IEA will be important for immediate direction.

The daily chart's M-formation is compelling as this is a reversion pattern that could see the price pulled back into the neckline of the 'M' in the coming sessions. the optimal entry point will be dependent on the forthcoming price action and dependent on a lower time frame break of structure. 

AUD/NZD is auctioning a marked territory as investors await Australian Consumer Inflation Expectations. Aussie Inflation Expectations are likely to remain higher due to the unavailability of a downside signal. The RBNZ has already raised its OCR to 2.5% to combat price pressures.

GBP/JPY is expected to report more losses after a downside move below 162.00. Vulnerable expectations for the UK economic data will keep the sterling bulls on the back foot. Japan’s cabinet re-shuffle is expected to result in a dramatic change in the Japanese yen on a broader basis.

USD/CHF remains depressed at four-month low, sidelined of late. Clear downside break of the 200-DMA, descending support line from late May favor sellers. 61.8% Fibonacci retracement level adds to the immediate upside filters.

The USD/JPY tanked more than 200 pips on Wednesday, courtesy of cooler-than-expected US CPI data, suggesting that the Federal Reserve might pivot, towards a dovish stance, spurring a risk-on impulse, with Wall Street’s recording substantial gains while the greenback weakened. However, as Thursday’s Asian Pacific session begins, the USD/JPY is trading at 132.85, further extending its weekly losses.

AUD/USD bulls take a breather around two-month top, after printing the biggest daily jump in eight weeks. Hawkish Fed bets slumped on easy US CPI for July, Fedspeak remains worrisome. US rethinks over China tariffs after the Taiwan incident and pokes risk-on mood amid recession fears. Australia’s Consumer Inflation Expectations for August appear important catalyst.

AUD/JPY has been seesawing within a 60-pip trading range for the last couple of days. The AUD/JPY daily chart is neutral, while the hourly time-frame further cements the case for consolidation.

EUR/USD retreats from five-week high of 1.0368, remains steady of late. US CPI tamed hawkish Fed expectations by easing below market forecasts, prior in July. Fed’s Kashkari backed recession fears, Biden teases Sino-American tussles. US PPI, Jobless Claims can entertain traders, risk catalysts are the key.

GBP/USD has picked bids around 1.2200 after a minor correction on the soaring market mood. Although the US inflation rate has been trimmed, the journey towards desired inflation is far from over. A downbeat consensus for UK GDP could conclude the run-up of pound bulls.

“China's war games around Taiwan have led Biden administration officials to recalibrate their thinking on whether to scrap some tariffs or potentially impose others on Beijing, setting those options aside for now, according to sources familiar with the deliberations,” said Reuters in late Wednesday.

Gold price (XAU/USD) has picked bids below $1,790.00 and is extending its recovery above the immediate hurdle of $1,792.00 amid a broader risk-on in the global market. The precious metal is expected to continue its upside run-up after a healthy correction to near $1,808.00 as the Federal Reserve (Fed) has got a sigh of relief after a downward shift in the US Consumer Price Index (CPI).

On Wednesday, the US Inflation landed at 8.5%, lower than the expectations of 8.7% and the prior release of 9.1%. Oil prices were vulnerable in July and they have been the real catalyst behind the soaring price pressures. Well, the downside pressure on the oil prices is temporary as the Russia-Ukraine war has made a serious dent in the oil supply for a prolonged period. And, the Fed needs a series of declines in the inflation rate to shift its stance to ‘neutral’.

Meanwhile, the US dollar index (DXY) is oscillating around 105.20, however, the downside remains favored as a lower...

Silver price edged up 0.57% on Wednesday after US inflation eased from 4-decade highs. US inflation annually decelerated from above 9% as gasoline prices dropped. Fed’s Evans and Kashkari expect further rate hikes. Fed’s Kashkari foresees the Federal funds rate (FFR) at 4% by the end of 2022.

The US Consumer Price Index rate contracted by more than anticipated in July. Wall Street soared ahead of the opening, retaining substantial gains. EUR/USD holds on to gains above 1.0300 and could extend its rally once above 1.0360.

The EUR/JPY plunged on Wednesday due to a risk-on impulse spurred by US inflation data, which ticked lower, dissipating the Federal Reserve’s need for an aggressive tightening. The reaction was that the US 10-year bond yield retraced, dragging the USD/JPY. Hence, the EUR/JPY followed suit, diving more than 100 pips towards its daily low at 136.94. At the time of writing, the EUR/JPY is trading at 136.86, down 0.81%.

NZD/USD rallied to fresh corrective highs on US CPI. The price is in no man's land at this juncture, a bearish correction, as per the W-formation on the daily chart, could be on the cards.

AUD/USD bulls are staying in control following CPI miss. There will be prospects of a correction so long as the Fed is seen to stay firm. The Aussie data to watch will be the employment report, 18 August. 

What you need to take care of on Thursday, August 11:

The greenback plummeted on the back of US inflation figures, ending the day in the red against all major rivals. The July Consumer Price Index contracted more than anticipated, down to 8.5% YoY from 9.1% in June. More relevantly, the core reading held steady at 5.9%, better than the uptick towards 6.1% anticipated.

Also, the Chinese Consumer Price Index rose by less than anticipated in July, up by 2.7% YoY from 2.5% in the previous month but below the 2.9% expected. In the same period, the Producer Price Index rose by 4.2%, well below the previous 6.1% and the expected 8%. Germany confirmed the July CPI at 7.5% YoY.

Stock markets soared with the news, as equities rallied on relief as easing US inflation should mean a less aggressive monetary tightening. Meanwhile, US government bond yields initially fell but quickly returned to...

The EUR/USD rises close to 1% after a lower-than-expected US inflation report. The shared currency failed to crack the 50-DMA early in the New York session. From a long-term perspective, the pair is neutral-to-downward, but the one-hour chart keeps buyers hopeful once they clear 1.0344.