Key Highlights
- Gold price started an upside correction from the $1,750 support.
- It is facing resistance near $1,820 and $1,835 on the 4-hours chart.
- EUR/USD could extend losses below 1.1750, GBP/USD failed to surpass 1.3900 and declined.
- The US CPI increased 5.4% in June 2021 (YoY), up from the last 5%.
Gold Price Technical Analysis
This past month, gold price saw a steady decline below $1,850 against the US Dollar. The price even traded below the $1,800 level before the bulls appeared near the $1,750 level.
The 4-hours chart of XAU/USD indicates that the price started a decent recovery wave from the $1,750 swing low. The price climbed above the $1,780 and $1,800 resistance levels.
There was also a close above $1,800 and the 100 simple moving average (red, 4-hours). However, the price is struggling to gain pace above $1,815 and $1,820. The next key resistance is near $1,835 and the 200 simple moving average (green, 4-hours).
The 50% Fib retracement level of the main decline from the $1,916 swing high to $1,750 low is also near the $1,833 level. A close above the $1,835 and $1,840 levels could start a steady increase towards the $1,900 level.
If not, the price could start a fresh decline below the $1,790 support level and the 100 SMA. The next major support is near the $1,750 level.
Fundamentally, the US CPI report for June 2021 was released yesterday by the US Bureau of Labor Statistics. The market was looking for an increase of 4.9% in the CPI compared with the same month a year ago.
The actual result was above the market forecast, as the US CPI increased 5.4% (YoY). Looking at the monthly change, there was an increase of 0.9%, up from the last 0.6%.
Overall, the US Dollar saw bullish moves after the release. It impacted both EUR/USD and GBP/USD, with bearish moves below 1.1850 and 1.3850.
Economic Releases to Watch Today
- UK Consumer Price Index for June 2021 (YoY) – Forecast +2.2%, versus +2.1% previous.
- UK Core Consumer Price Index for June 2021 (YoY) – Forecast +2.0%, versus +2.0% previous.
- US Producer Price Index for June 2021 (MoM) – Forecast +0.6%, versus +0.8% previous.
- US Producer Price Index for June 2021 (YoY) – Forecast +6.8%, versus +6.6% previous.
- BoC Interest Rate Decision – Forecast 0.25%, versus 0.25% previous.
