Last week I gave a trade idea on XAUUSD with a target around the $2,020 price line. At the time of writing, XAUUSD already exceeded the target and I’m sure that would leave a lot of people wondering what to expect next. Below, I have presented my view of how I expect the price action to turn out in the meantime.
CPI release will decide the next FOMC step
2023-07-12 • Updated
Today's focus is on the US CPI data, which experts believe will be better than expected. The forecasted US CPI m/m is 0.3%, and y/y is 3.1%, a positive sign for the market as the Fed's inflation target is 2%. Even a strong inflation reading may lead to one more interest rate hike, keeping traders somewhat worried. The reaction of the 2-year Treasury yield and the dollar index will indicate the Fed's next move. With inflation slowing down, the path of least resistance for the US equity market is skewed to the upside.
US DOLLAR - D1 Timeframe
The US Dollar on the daily timeframe has reached a significant mark. As the chart highlights, the demand zone presents a reliable point of interest for a likely reversal in the price action toward the resistance trendline. If the CPI figures are higher-than-expected, this is likely the course of movement on the Dollar.
GBPUSD - D1 Timeframe
The upward movement of GBPUSD has been a steady climb in a channel pattern which seems to now be approaching a key area of resistance. As shown in the attached chart, the supply zone has further confluence from the resistance trendline and could be a turning point for the bullish price action - should the CPI favor the Dollar, as I mentioned earlier.
EURUSD - D1 Timeframe
EURUSD is another likely candidate for a brilliant reversal stunt. We currently see price trading within the supply zone right next to a major pivot level from the Weekly timeframe. Based on this and the likelihood of a positive CPI outcome for the Dollar, I would look for opportunities to short the market, possibly to the support trendline.
The trading of CFDs comes at a risk. Thus, to succeed, you have to manage risks properly. To avoid costly mistakes while you look to trade these opportunities, be sure to do your due diligence and manage your risk appropriately.
You can access more of such trade ideas and prompt market updates on the telegram channel.
Last Tuesday, the Australian dollar experienced its steepest drop of the year, falling by 1.18%, following higher-than-expected US inflation figures, which boosted the US dollar. However, the Aussie has since rebounded and is now trading at a two-week high against the US dollar. Investors are...
Commerzbank's analysis suggests a brighter outlook for the New Zealand Dollar (NZD) in the coming months despite recent downward pressure. Factors like broader U.S. Dollar strength and domestic issues have kept the NZD below last year's highs. However, robust labor markets in both New Zealand and Australia and an expected...
On Friday, the gold price (XAUUSD) retreated from a recent two-week high, facing selling pressure. This decline was driven by hawkish minutes from the FOMC meeting, indicating the Fed's reluctance to cut interest rates. Elevated US Treasury bond yields, supported by a "higher-for-longer" narrative, further weakened demand for gold...
Bearish Scenario: Selling below 22.65 with TP1: 22.34 (intraday) and TP2: 22.02 (swing). Bullish Scenario: Buying above 22.70 with TP1: 22.90.
Intraday and swing scenarios based on price action and volume profile.