Japan’s CPI rates came in higher than expected

Japan’s CPI rates for January which were released during today’s Asian session came in higher than expected. In particular the Core CPI rate came at 2% whilst the expected rate was 1.9%. Following the release, the Yen appears to have strengthened, yet the positive impact appears to have been minimal following the release as the previous CPI rate was 2.3%. In the grander scheme of things, persistent inflationary pressures in the Japanese economy could potentially warrant a more hawkish stance by the bank, which could in the long run provide support for the JPY. In the US Equities markets, we note the report that was released by the FAA yesterday in which Boeing’s safety culture came under scrutiny by the regulator. Furthermore, the report stated that the way Boeing managerial hierarchy was structured could lead to a manager investigating a report within their own chain, “potentially compromising Boeing’s commitment to a non-retaliatory and impartial environment”. Essentially, increasing the risk that safety concerns may have not been raised by employees in fear of retaliation by their managers. In conclusion, the statement could weigh on Boeing’s (#BA) stock price. On a geopolitical level, we note the headline by Reuters which states that US President Biden has stated that Israel has agreed to stop its attacks in Gaza for Ramadan. The pause in fighting could potentially facilitate the progression of the proposed truce agreement, thus potentially easing tensions in the region. In such a scenario, with tensions potentially subsiding in the Middle East, we may see the developments weighing on the price of oil, as oil supply arteries may begin to re-open.

GBP/USD appears to continue moving in an upwards fashion. We continue to maintain a bullish outlook for the pair and supporting our case is the upwards moving channel which was incepted on the 14^th of February, in addition to the RSI indicator below our chart currently registering a figure near 60, implying bullish market tendencies. For our bullish outlook to continue, we would like to see the continuation of our upwards-moving channel, in addition to a clear break above the 1.2760 (R1) resistance level, with the next possible target for the bulls being the 1.2870 (R2) resistance line. On the other hand, for a sideways bias, we would like to see the pair remain confined between the 1.2610 (S1) support level and the 1.2760 (R1) resistance line. Lastly, for a bearish outlook we would like to see a clear break below the 1.2610 (S1) support level, with the next possible target for the bears being the 1.2470 (S2) support line.

WTICash appears to be moving in a sideways fashion. We maintain a sideways bias for the commodity and supporting our case is the RSI indicator below our chart which currently registers a figure near 50, implying a neutral market sentiment, in addition to the sideways moving channel which was incepted on the 15^th of February. For our sideways bias to continue, we would like to see the commodity remain confined between the  75.80 (S1) support level and the 78.65 (R1) resistance line. On the other hand, for a bearish outlook we would like to see a clear break below the 75.80 (S1) support level, with the next possible target for the bears being the 71.60 (S2) support base. Lastly, for a bullish outlook, we would like to see a clear break above the 78.65 (R1) resistance level, with the next possible target for the bulls being the 81.65 (R2) resistance ceiling.

Other highlights for the day:

We note in today’s European Session the release of Germany’s Gfk Consumer sentiment figure for March. In today’s American session, we note the US Durable Goods orders rate for January, the US monthly home price rate for December and the US Consumer confidence figure for February. In tomorrow’s Asian session, we note Australia’s CPI rates for January. On a monetary level, we note the speeches by Riksbank Governor Thedeen, BoE Deputy Governor Ramsden and Fed Vice Chair Bar, which are all due to occur today. Lastly, for tomorrow’s Asian session we note New Zealand’s interest rate decision.

GBP/USD H4 Chart

Support: 1.2610 (S1), 1.2470 (S2), 1.2320 (S3)

Resistance: 1.2760 (R1), 1.2870 (R2), 1.2990 (R3)

WTICash H4 Chart

Support: 75.80 (S1), 71.60 (S2), 68.20 (S3)

Resistance: 78.65 (R1), 81.65 (R2), 85.45  (R3)

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