With the ongoing meltdown in the banking sector sparking worries of a recession, the US inflation report will be closely watched today, which will be released at 12:30 GMT. The inflation data could determine the size of the US Federal Reserve's rate hike at next week’s policy meeting. On a yearly basis, the Consumer Price Index (CPI) in the US is forecast to be 6.0% in February from 6.4% in January.
The markets should react positively if inflation shows further signs of cooling which will help the stocks, commodities, and Crypto pairs to regain upside momentum. While another jump in US consumer price inflation may solidify expectations around the Federal Reserve hiking rates by another 25 basis points in the next meeting.
US futures continues its sideways move after the strong sell-off as investors have adopted a ‘wait and watch’ approach ahead of the US CPI data, the data could help investors determine how the Federal Reserve will move ahead with its interest rate policy.
Crude oil futures remain under pressure as the collapse of Silicon Valley Bank raised concerns about a broader economic slowdown, triggering a selloff in risk assets. Moving ahead, the oil traders also waiting for this week's OPEC monthly report, which will help form an outlook for the demand-supply balance.
In the currency market, EURUSD bulls remain in the driving seat with their feet on the accelerator supported by the weak US dollar. However, the future direction of the Euro largely depends on this week's ECB meeting outcome, the Euro traders and investors are focused on possible measures and changes that the European Central Bank may undertake in the March meeting. The dollar has declined fractionally over the last four trading days.
The precious metal rallied to a fresh monthly high of $1912 as renewed recession fears and global growth concerns offered an opportunity for the precious metal to shine. At the time of writing, the yellow metal slightly reversed from the highs. Considering the recent bullish move gold investors will closely monitor the release of US inflation data.
On the data front, the UK reported mixed employment reports. The jobs report showed that the number of people claiming unemployment-related benefits fell by 11.2K in February, less than the 12.4k declines expected. While the unemployment rate in the United Kingdom came in at 3.7 percent, slightly below the market consensus of 3.8 percent.
Moving ahead today, the important events to watch:
US – OPEC monthly report: GMT – 11:00
US – CPI: GMT – 12:30
Technical Outlook and Review
EURUSD: The currency pair needs to stay above 1.0700; otherwise. 1.0630/10 may be visible soon. On the upper side, 1.0740 is the key resistance zones to watch, if the pair breaks and close above this area then the next resistance area to watch is around 1.0780 and 1.0810.
The important levels to watch for today: Support- 1.0670 and 1.0630 Resistance- 1.0710 and 1.0740.
GOLD: The technical scenario is bullish after the price breaks above the psychological mark of $1900. If the bullish momentum continues, then the next upside levels to watch and $1914 and $1920. On the downside, any meaningful pullback now seems to find some support near the $1895 zones, below which the slide could further get extended towards the $1880 and $1874 region.
The important levels to watch for today: Support- 1895 and 1880 Resistance- 1914 and 1920.
Quote of the day – “There are two requirements for success in Wall Street. One, you have to think correctly; and secondly, you have to think independently.” - Benjamin Graham.