Asian indices are facing pressure as investors prefer to move light for the US inflation event. (Pivot Orderbook analysis)

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• Asian indices are facing pressure as investors prefer to move light for the US inflation event.
• Rising odds of BOJ’s intervention in currency markets are hurting the sentiment of Japanese investors.
• Oil prices have sensed selling interest on escalating US recession fears.

The pair currently trades last at 26440.48.

The previous day high was 26578.15 while the previous day low was 26385.7. The daily 38.2% Fib levels comes at 26459.22, expected to provide resistance. Similarly, the daily 61.8% fib level is at 26504.63, expected to provide resistance.

Markets in the Asian domain are following the footprints of the S&P500 as escalating anxiety ahead of the US Consumer Price Index (CPI) release has forced investors to remain on the sidelines. Asian equities have witnessed a sell-off amid the risk-off impulse, citing gloomy growth outlook and signs of recession situation in the US economy responsible, apart from the Fed’s tight policy.

At the press time, Japan’s Nikkei225 dropped 0.48%, ChinaA50 tumbled 1.10%, Hang Seng dived 1.26% and Nifty50 declined 0.62%.

Accelerating odds of the Bank of Japan (BOJ)’s intervention in the currency markets is hurting the sentiment of Japan’s investors. Chatters over intervention are bolstering the fact that the Japanese yen could weaken further. This may hurt the firms which are highly dependent on other countries for raw materials.

Indian indices have taken a hit after a jump in inflationary pressures. Headline inflation for September has landed higher at 7.4% vs. the prior release of 7.0% while the core CPI has escalated to 6.1%. This will weigh pressure on the Reserve Bank of India (RBI) to hike interest rates further.

Meanwhile, the US dollar index (DXY) has continued with its lackluster performance ahead of the US CPI data. As per the consensus, the headline inflation data will decline to 8.1% while the core CPI that excludes oil and food prices will increase to 6.5%. No matter, if the inflation rate drops or accelerates, volatility will explode for sure as September’s inflation report shares the spotlight with the quarterly result season.

On the oil front, oil prices are sideways after dropping to near $85.00. Weakness is expected to persist in the oil prices as fears of a recession situation in the US economy have heightened. Also, commentary from US President Joe Biden that recession will be slight if US encounters don’t bar the recession fears.

Technical Levels: Supports and Resistances

XTIUSD currently trading at 26440.48 at the time of writing. Pair opened at 26440.48 and is trading with a change of 0.0 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 26947.87, 50 SMA 27702.44, 100 SMA @ 27359.68 and 200 SMA @ 27208.86.

The previous day high was 26578.15 while the previous day low was 26385.7. The daily 38.2% Fib levels comes at 26459.22, expected to provide resistance. Similarly, the daily 61.8% fib level is at 26504.63, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 26358.07, 26275.66, 26165.62
• Pivot resistance is noted at 26550.52, 26660.56, 26742.97

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