What Gold Will Do- USD's Big Week Could Cause Breakout?
Frank Cabibi
7/12/2021
Every day this week, the US will report some kind of important economic news that is bound to shape the dollar's demand for the week's ahead. It will undoubtedly affect all major USD pairs including gold which is already tumbling this morning in anticipation of all the news. This week's report includes US CPI, PPI, Retail Sales and a couple testimonies from Fed chairman Jerome Powell.
Our outlook
Although I am bullish on gold in the long term, I have to consider the fact that this week could release some good numbers, and that would inversely affect gold's price. However, the past few week's haven't been exactly bullish for the dollar as unemployment claims rose along with the volume of the US's labor pool. There have been some minor signs that the US economy is slowing, but this week's numbers could also prove all of that wrong. Tomorrow's CPI report is a big one to start out with and may catalyze the direction of USD and gold for the week. If the consumer price index is higher that expected, that's a bearish sign for USD unless the Fed decides to hike rates earlier than expected. So, a higher CPI will probably lead to a bullish case for gold this week.
Trade Setups
XAUUSD
Here's gold on the 4H looking like support is holding price up from the lows. If the candle can close around this area and show that big rejection, we could be looking at another test at the top of the channel. Other than that, there isn't a clear support level under the current one at $1790, at least from what I can see.
The 1D chart shows us that gold has a major support level that served as a bottom in February, at top in March and April, a bottom in April, and now a bottom in June starting around $1760 and goes down to $1750. If price can't hold at these levels, the major support below could be a good entry point for those trying to go long gold.
XAGUSD
Silver isn't much of a mover, but is holding up well on its 200 DMA. A support line also lies right below the moving average around $25.62 on the 1D chart.
A1 Edgefinder
Watchlist
Save time looking for setups with the EdgeFinder's watchlist! In a glance, see the EdgeFinder's current top buys and top sells.
The dollar flew higher last week as a result of resilient economic news along with a higher PCE than expected. Now the DXY has reached a decision point in price action. This week's NFP will help determine the sentiment around the potential June rate hike. Here is what we are looking at: EdgeFinder Analysis USDCAD […]
Considerably dovish news from central banks in the US and New Zealand has caused a major stir in the markets. Governor Orr and Vice Chairman Powell both released some reassuring news for the economy in the long term. But what does this mean for USD and NZD? EdgeFinder Analysis GBPNZD is a pair that should […]
As we trade into a broad news week covering the economic status of multiple countries, there are several scenarios we should consider. Although it is impossible to predict the future, we can at least prepare for the news events set to come this week for kiwi, dollar and the pound. EdgeFinder Analysis GBPJPY still maintains […]
DISCLAIMER: All comments made by TraderNick’s Forex Group, LLC are for educational and informational purposes only. All comments should not be construed as investment advice regarding the purchase or sale of any securities or financial instrument of any kind. Please consult with your financial adviser before making an investment decision regarding any securities or financial instruments mentioned by TraderNick’s Forex Group, LLC. TraderNick’s Forex Group, LLC assumes no responsibility for your trading and investment results. All information on any of the platforms utilized by TraderNick’s Forex Group, LLC was obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. TraderNick’s Forex Group, LLC, its employees, representatives, and affiliated individuals may have a position or effect transactions in the securities and financial instruments herein and or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. Trading of any type involves very high risk and may not be suitable for all investors. TraderNick’s Forex Group, LLC, its subsidiaries and all affiliated individuals assume no responsibility for your trading and investment result. Read our full disclaimer here