The risk-off mood ahead of US inflation is keeping Asian indices on the tenterhooks. (Pivot Orderbook analysis)

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• The risk-off mood ahead of US inflation is keeping Asian indices on the tenterhooks.
• Softer-than-anticipated China inflation numbers have impacted Chinese equities heavily.
• Japanese investors are highly focused for the novel leadership of the BoJ for further cues.

The pair currently trades last at 27581.2.

The previous day high was 27733.79 while the previous day low was 27511.62. The daily 38.2% Fib levels comes at 27648.92, expected to provide resistance. Similarly, the daily 61.8% fib level is at 27596.49, expected to provide resistance.

Markets in the Asian domain are demonstrating weakness considering the risk-off market mood propelled ahead of the United States Consumer Price Index (CPI) data, scheduled for Tuesday. S&P500 futures are facing immense pressure as investors are worried that more interest rate hikes by Federal Reserve (Fed) chair Jerome Powell in his battle against stubborn inflation. The 500-US stocks basket futures have reported a sell-off in the past two trading sessions and more losses are in pipeline considered the current move.

At the press time, Japan’s Nikkei225 added 0.25%, ChinaA50 dropped 0.63%, Hang Seng plunged 1.80%, and Nifty50 surrendered 0.36%.

The expression of deflation from China’s Consumer Price Index (CPI) (Jan) report has impacted equities dramatically. The annual inflation data has landed at 2.1%, between the consensus of 2.2% and the prior release of 1.8%. The monthly inflation figure has shown a deflation of 0.8% against an expansion in the inflationary pressures by 0.7%.

Meanwhile, China’s Producer Price Index (PPI) has shown a deflation of 0.8% higher than the projections of 0.5% and the former release of 0.7%. It indicates that producers are heavily cutting prices of goods and services at factory gates due to weak demand by the households.

This might compel the People’s Bank of China (PBoC) and the Chinese authorities to fuel helicopter money to support the economy, which is still recovering from the rollback of pandemic curbs.

Japanese stocks are mildly positive as investors are gearing up for novel Bank of Japan (BoJ) leadership after a long period of service by current Governor Haruhiko Kuroda. Japan’s government might reveal the new nomination for BoJ Governor on Feb 14.

The oil price is juggling above the critical support of $77.50 after a softer China inflation data. An absence in consumer spending recovery despite the lifting of the pandemic controls is indicating that investors need to wait more than anticipated as the economy will take sufficient time in achieving pre-pandemic growth levels.

Technical Levels: Supports and Resistances

XTIUSD currently trading at 27581.2 at the time of writing. Pair opened at 27581.2 and is trading with a change of 0.0 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 27145.72, 50 SMA 26933.26, 100 SMA @ 27170.26 and 200 SMA @ 27250.12.

The previous day high was 27733.79 while the previous day low was 27511.62. The daily 38.2% Fib levels comes at 27648.92, expected to provide resistance. Similarly, the daily 61.8% fib level is at 27596.49, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 27483.95, 27386.7, 27261.78
• Pivot resistance is noted at 27706.12, 27831.04, 27928.29

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