As you must already know, the direction of Gold is mainly dependent on the Price action of DXY (US Dollar index). So first, we take a look at the US Dollar index.
EUR/USD still has a chance to rise
2019-11-11 • Updated
TP1 1.1725 TP2 1.1825 TP3 1.2035
On the daily chart, EUR/USD was forming a “Shakeout-Fakeout” pattern dueing the 2 consecutive months. Both bears in August and bulls in September failed to lead the pair outside of the 1.15-1.1850 trading range. As a result, the test of support at 1.1625 will be important.
On H1, EUR/USD formed a “Shark” pattern. Its 113% target and 38.2% level of the last rising wave form the convergence area. A recovery from it will allow bulls to resume the uptrend.
On January 12, the Bureau of Statistics will publish the Consumer Price Index (CPI) figures, a key index for determining interest rates. While we await the release, experts forecast a decline in the CPI data, a hint at weaker Dollar values in the global markets.
The trend in the scenario above is clearly bearish. We have also had a recent break of structure at the marked horizontal arrows, which means we can expect price to react from the supply zone that broke the structure.
On Thursday, the 2nd of February, the Bank of England will publish its report concerning interest rates and inflation data for the Eurozone. Professionals and investors anticipate that Andrew Bailey’s lead team of policy makers will likely raise interest rates to 4%; the highest in over a decade, for the tenth time in a row.
The first FOMC meeting comes after a buildup of anticipation from traders and investors alike, as the markets await what posture the Fed will take regarding the interest rates; would there be a hike or a cut in interest rates?
Western countries are trying to find other options for oil and gas supplies after a 10th package of sanctions, which will put more pressure on Russian oil and decrease global oil supply. Italy, for example, is in talks with Libya.