Gold Technical Analysis – Eyes on the US CPI

Fundamental
Overview

Gold pulled back from the
highs yesterday as the recent rise in real yields and the US dollar eventually weighed
on the market. The focus has now switched to the US CPI report due later today.
Higher than expected data should provide a deeper pullback as real yields will
likely rise further. Conversely, a soft report might give gold another boost to
push into a new all-time high.

Gold
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that gold extended the rally into yet another all-time high recently. From
a risk management perspective, the buyers will have a better risk to reward
setup around the 2790 level, while the sellers will look for a break below the
level to start targeting the 2600 level next.

Gold Technical Analysis
– 4 hour Timeframe

On the 4 hour chart, we can
see that the momentum became even stronger recently as the price got further
away from the trendline. If we get a deeper pullback, we
can expect the buyers to lean on the trendline again with a defined risk below
it to position for a rally into new highs. The sellers, on the other hand, will
want to see the price breaking lower to increase the bearish bets into the 2600
level next.

Gold Technical Analysis
– 1 hour Timeframe

On the 1 hour chart, we can
see that we have a strong support
zone around the 2882 level where the price got rejected from several times in
the past weeks. This is where we can expect the buyers to step in with a
defined risk below the support to position for a rally into new highs.

The sellers, on the other
hand, will want to see the price breaking lower to increase the bearish bets
into the major trendline next. The red lines define the average daily range for today

Upcoming
Catalysts

Today, we have the US CPI report. Tomorrow, we get the US
PPI and the latest US Jobless Claims figures. On Friday, we conclude the week with
the US Retail Sales data.

Watch the video below

This article was written by Giuseppe Dellamotta at www.forexlive.com.