Technical analysis of gold
Gold broke key support after hot US CPI release.
What is the next move?
Gold sold off on Tuesday following a hot U.S. CPI report as it boosted real yields and led to a sharp rally in the U.S. dollar. The market continues to reduce interest rate cut expectations as economic data continues to surprise and bullish.
In the bigger picture, gold should be supported by expectations of a rate cut cycle.
Daily chart
On the daily chart, we can see that gold broke through key support around the 2015 level after the hot US CPI report. A natural target for sellers should be the 1975-1970 level.
4 hour chart
On the 4-hour chart, we can see that from a risk management perspective, sellers would have a much better risk setting their trade around the 2015 resistance, where we can find a trend line intersection and the 8.61% Fibonacci retracement level.
On the other hand, buyers want to see the price move higher to invalidate the bearish setup and increase bullish trades to the 2063 level.
1 hour chart
On the 1-hour chart, we can see that the price has been consolidating since the sharp decline in the US CPI report. We now have a minor resistance area around the 1998 level, which is what buyers need to break to start targeting the 2015 resistance going forward. On the other hand, sellers continue to defend the level with defined risk above it to fall to the 1970-1975 level.
Gold broke key support after hot US CPI release.
What is the next move?
Gold sold off on Tuesday following a hot U.S. CPI report as it boosted real yields and led to a sharp rally in the U.S. dollar. The market continues to reduce interest rate cut expectations as economic data continues to surprise and bullish.
In the bigger picture, gold should be supported by expectations of a rate cut cycle.
Daily chart
On the daily chart, we can see that gold broke through key support around the 2015 level after the hot US CPI report. A natural target for sellers should be the 1975-1970 level.
4 hour chart
On the 4-hour chart, we can see that from a risk management perspective, sellers would have a much better risk setting their trade around the 2015 resistance, where we can find a trend line intersection and the 8.61% Fibonacci retracement level.
On the other hand, buyers want to see the price move higher to invalidate the bearish setup and increase bullish trades to the 2063 level.
1 hour chart
On the 1-hour chart, we can see that the price has been consolidating since the sharp decline in the US CPI report. We now have a minor resistance area around the 1998 level, which is what buyers need to break to start targeting the 2015 resistance going forward. On the other hand, sellers continue to defend the level with defined risk above it to fall to the 1970-1975 level.