What Gold Will Do- USD's Big Week Could Cause Breakout?
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.
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.
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.
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.
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