Gold Trades Marginally Lower Ahead of U.S.’s CPI Results, $12+ Movement Likely; March 10, 2021
U.S. CPI & Core CPI Data
Today U.S. will release CPI as well as Core CPI data at 1330 GMT/1900 IST. Consumer prices account for a majority of overall inflation. Inflation is important to currency valuation because rising prices lead the central bank to raise interest rates out of respect for their inflation containment mandate. In case of Core CPI data, food and energy prices account for about a quarter of CPI, but they tend to be very volatile and distort the underlying trend. The FOMC usually pays more attention to the Core data – so do traders. If the actual data comes higher than expected, it will be good for U.S. dollar.
Let’s see how Gold has reacted during the previous data release:
XAU/USD (Gold): The gold moves in stiff boundaries on Wednesday and hovers around $1,710 mark. The pair made intraday high at $1,719 and low at $1,709 mark. Today the day candle with triple EMA confirms the bearish trend while the H1 chart with triple EMA suggests some upside pressure. A sustained close above $1,718 on H1 chart requires for the upside rally. Alternatively, current downside movement will drag the parity back below $1,700 mark.
Key Resistances: $1,718, $1,722, $1,727, $1,732, $1,740
Key Supports: $1,702, $1,691, $1,685, $1,678, $1,670
Take a look and do trade wisely!