The US CPI missed across the board this week causing big moves as the market expected the Fed to end its tightening cycle really soon. The probabilities of a July rate hike though remained unchanged due to the tight labour market and the lack of hints for a skip or a pause from the Fed members after the CPI release. Nevertheless, the market is now looking forward to when the data will start to point to rate cuts and Gold should be supported as a result.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that the 61.8% Fibonacci retracement level managed to stop the fall in Gold eventually. The price has broken to the upside the downward trendline and then the key 1934 resistance after the CPI report and it’s now looking at the 1984 resistance. The moving averages have crossed to the upside again indicating a change in trend.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price is consolidating a bit after the big run to the upside after the miss in the US CPI report. The bias now is bullish as the moving averages are crossed to the upside and there’s no real technical resistance until the 1984 level.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a good support zone at the trendline where there’s also the 38.2% Fibonacci retracement level for confluence. The buyers should step in here with a defined risk below the trendline and target the 1984 resistance. The sellers, on the other hand, will want to see the price breaking lower to pile in and extend the fall into the 1934 support.
Upcoming Events
Today we have the University of Michigan Consumer Sentiment report, but it’s unlikely to cause big moves in the markets unless we see some notable deviation from the expected numbers. The market though is likely to focus more on the inflation expectations figures and a lower-than-expected reading there, especially on the long-term expectations, should give Gold some more support.
