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.
What to expect from the forex market after lower than expected CPI release?
2023-11-15 • Updated
The U.S. dollar experienced significant losses as October's inflation data hinted at the Federal Reserve concluding interest rate hikes. The dollar index dropped 1.50% to its lowest since September. October's consumer price index (CPI) showed a flat monthly change and a 3.2% increase over the previous year, with core CPI slightly below forecasts at 0.2% and 4%. U.S. Treasury yields fell, with the 10-year yield dropping over 18 basis points to 4.4%. Analysts suggest the Fed might halt rate hikes due to soft inflation and tight financial conditions, with markets anticipating rate cuts in May 2024.
GBPUSD - D1 Timeframe
GBPUSD on the Daily timeframe chart, as seen above, is currently trading within a supply zone. The 100-day moving average provides additional confluence for a possible bearish momentum. Another considerable confluence is the fact that the 50-day moving average is currently below the 100 and 200 period moving averages.
EURUSD - D1 Timeframe
When a trendline supports gets broken, it flips over and becomes a resistance - this is basic break-and-retest knowledge. Considering that price is retesting the trendline resistance whilst inside a supply zone - as seen in the chart - adds further confirmation to the possibility of a drop in prices.
USDCHF - D1 Timeframe
The Daily timeframe of the USDCHF chart is currently approaching a demand zone. A few other confluences to consider in favour of the bullish movement include; the trendline support, the 100-day moving average support, and the 88% of the Fibonacci retracement level.
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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.