Asian equities are showing mixed responses ahead of US inflation data. (Pivot Orderbook analysis)

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• Asian equities are showing mixed responses ahead of US inflation data.
• Japanese equities are showing resilience as the BoJ is required to infuse more stimulus to keep inflation steadily higher.
• Oil prices have soared to near a two-month high around $81.75 as the street is anticipating a quick softening of US inflation.

The pair currently trades last at 28013.95.

The previous day high was 28073.37 while the previous day low was 27650.84. The daily 38.2% Fib levels comes at 27911.96, expected to provide support. Similarly, the daily 61.8% fib level is at 27812.25, expected to provide support.

Markets in the Asian domain are showing mixed responses ahead of United States inflation data. S&P500 futures are choppy in early trade as investors are anxious ahead of US Consumer Price Index (CPI) and quarterly result season. The street is divided about the US result season as one class of investors believe the higher rates from the Federal Reserve (Fed) and banking crisis have hit overall demand while the other school of thought believes that robust requirement of labor is the outcome of upbeat retail demand.

The US Dollar Index (DXY) is prone to test the immediate support of 102.00 as Fed policymakers have advised maintaining caution while considering May’s monetary policy. Chicago Fed President Austan Goolsbee has advised a cautious approach as the combination of tight credit conditions and further restrictive monetary policy can hit sectors and regions differently than if monetary policy was acting on its own.

At the press time, Japan’s Nikkei225 jumped 0.61%, ChinaA50 dropped 0.52%, Hang Seng tumbled 0.74%, KOSPI gained 0.21%, and Nifty50 added 0.16%.

Japanese equities are showing resilience as the Bank of Japan (BoJ) is required to infuse more stimulus into the economy to keep inflation steadily above the desired rate. Meanwhile, monthly Producers Price Index (PPI) numbers have shown a stagnant performance as expected by market participants. While annual PPI softened further to 7.2% from the prior release of 8.0% but remained higher than the consensus of 7.1%. This conveys the inability of firms in hiking the prices of goods and services amid weaker retail demand despite an increase in wage growth.

Chinese stocks have hogged the limelight despite investors losing confidence in stellar economic recovery. The economy is in a disinflationary process due to weak retail demand. China’s Consumer Price Index (CPI) is continuously declining despite monetary support from the administration after lifting Covid controls.

On the oil front, oil prices have soared to near two-month high around $81.75 as the street is anticipating a quick softening of US inflation after commentary from Minneapolis Fed Bank President Neel Kashkari. Fed policymaker sees inflation at the middle 3% by end of this year, closer to 2% next year.

Technical Levels: Supports and Resistances

XTIUSD currently trading at 28013.95 at the time of writing. Pair opened at 28013.95 and is trading with a change of 0.0 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 27617.89, 50 SMA 27646.26, 100 SMA @ 27334.6 and 200 SMA @ 27436.32.

The previous day high was 28073.37 while the previous day low was 27650.84. The daily 38.2% Fib levels comes at 27911.96, expected to provide support. Similarly, the daily 61.8% fib level is at 27812.25, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 27752.07, 27490.19, 27329.54
• Pivot resistance is noted at 28174.6, 28335.25, 28597.13

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