XAUUSD thread water as US CPI data due later today.
“US inflation data to determine overall market structure, which may bring significant volatility.”
XAUUSD stabilizes around 1880 as market participants wait for the release of US inflation data later today. The data, which will cement the expectation for less aggressive Fed may spur high volatility and a shift in all related assets. Such expectation was formed over the basis of lower-than-expected CPI reading in November, which reflects possible outcome from Fed’s aggressive tightening since last year.
Quick recap on XAUUSD
The bullion recovered substantially from lower end after forming a semi strong support at around 1620.
XAUUSD Weekly Technical Analysis
From weekly perspective, XAUUSD extended its gains after rebounding from lower levels and closing above the downward trendline.
XAUUSD Daily Technical Analysis
However, upside momentum from daily perspective shows slight reduction, signalling possible reversal soon. Likewise, such hypothesis is cemented by negative divergence which has formed on the indicator.
Trading Idea
ORDER: SELL STOP
ENTRY: 1860
STOP LOSS: 1890
Target 1: 1830
Target 2: 1800
ZFX Analyst’s Comment
While technical aspect supports for a short-term reversal, we would still have to wait for further confirmation from tonight’s inflation data. Thus, it is advisable to remain vigilant in the meantime.
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