CPI Data Lifts Dollar, Traders Scale Back Fed Cuts

Market Overview

Australia

The Australian dollar (AUD) rebounded to nearly 0.6530 USD after three consecutive losing sessions, supported by a weakening yen and anticipation ahead of the upcoming June employment report. Although the AUD fell overnight due to a stronger USD driven by high U.S. inflation, market sentiment recovered as AUD/JPY broke above the 97.00 mark for the first time since February.

Australia’s 10-year bond yield rose to 4.44%, nearing a 7-week high. Thursday's employment data is expected to show an increase of 20,000 jobs with the unemployment rate holding steady at 4.1%. Markets currently price in an 80% chance of a rate cut by the RBA in August, but a strong jobs report could shift that expectation.

Japan

The Japanese market came under pressure as expectations for a Fed rate cut weakened. Although U.S. core inflation in June rose slightly by 2.9% year-over-year, it remains above the Fed's 2% target, reducing the probability of a September rate cut to 53.5%. A stronger U.S. dollar pushed USD/JPY to hover around 148.86.

Japanese stocks edged lower in the morning session amid concerns over U.S. tariff policy. The Nikkei index fell 0.3%, with auto and financial stocks under pressure. The 10-year JGB yield inched up to 1.59% amid a weaker yen and rising imported inflation pressures.

Bitcoin (BTCUSD)

Fundamental Analysis

Bitcoin is hovering around $116,900 after reaching a peak of $123,000. The recent strong rally has been fueled by expectations of reduced supply and growing demand from ultra-wealthy investors. Technical analyst XForceGlobal believes BTC is in a parabolic uptrend based on the Elliott Wave pattern, with a medium-term target of $155,000 and a long-term potential to surpass $270,000. However, he also warned of the likelihood of a sharp correction after the peak and urged investors to plan their exit strategies in advance.
 
Technical Analysis
 
Current trend: Strong short-term uptrend following a breakout above the $112,000 resistance zone. Current price: $117,487, after a mild pullback from the recent high of $123,236.
 
There was a significant volume spike during the rally from $112K to $123K, confirming strong inflows of capital.The current pullback is accompanied by declining volume, indicating a lack of strong selling pressure — a positive sign for trend continuation.

EURUSD

Fundamental Analysis

The U.S. Consumer Price Index (CPI) recorded its strongest increase in five months, sending the USD surging to a 15-week high against the JPY. Traders have scaled back expectations for Fed rate cuts in 2025, now pricing in only about 44 basis points, although a rate cut in September remains on the table.

Former President Trump's tariff policy continues to add inflationary pressure, while the European Central Bank (ECB) maintains a dovish stance. The euro (EUR) fell 0.45% against the USD to 1.1611, its lowest level since late June.
 Technical Analysis

Short-term trend: Bearish correction — price has broken below both the 34 EMA and 89 EMA and is now retesting the 200 EMA.
 
The current RSI is at 32.75 — nearing the oversold zone, suggesting a potential technical rebound. However, the steadily declining RSI trend confirms strong recent selling pressure.

A spike in volume during the recent bearish candle indicates that the breakdown was backed by real selling force. It's crucial to monitor whether volume starts to decline, which would help confirm the potential formation of a short-term bottom.

Gold Spot (XAUUSD)

Fundamental Analysis

Gold prices are fluctuating slightly around $3,330/oz as expectations for Fed rate cuts weaken due to U.S. CPI data. Despite a slowdown in ETF demand, the World Gold Council remains optimistic, forecasting that gold prices could rise another 0%–5% in the second half of the year if geopolitical tensions persist. However, if global tensions ease, gold could see a correction of 12%–17% from its early-year gains. Key supporting factors—such as safe-haven demand, central bank buying, and financial instability—continue to play a major role in the outlook for gold prices.
 
Technical Analysis

Price is currently in a short-term accumulation/consolidation phase, fluctuating within a range of $3,294 to $3,380.In the medium term, there are signs of slight bearish pressure after a rejection from the supply zone between $3,360 and $3,380.
 
Current price: $3,328.795 — below both the 34 EMA and 89 EMA (short to medium term), but near the 200 EMA (long term), indicating weakening bullish momentum.

 

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