Consumer Price Index (CPI): The first high-impact data release of the week will be Tuesday’s CPI report from the US. Cleveland Federal Reserve Bank President Loretta Mester said on Friday that she sees upside risks to the inflation forecast and voiced her support for tapering to start before the end of the year. On a similar note, Atlanta Federal Reserve President Raphael Bostic noted that it would be appropriate to taper sometime this year.
A stronger-than-expected CPI reading could cause investors to start pricing in a reduction in the Fed’s asset purchases and provide a boost to the USD and vice versa.
On Wednesday, Chinese Industrial Production and Retail Sales figures will be looked upon for fresh impetus. However, the muted market reaction to the latest trade data from China suggests that the impact of these readings on market sentiment is likely to remain limited.
Retail Sales and Philadelphia Fed Manufacturing Survey will be featured in the US economic docket on Thursday ahead of the University of Michigan’s preliminary Consumer Sentiment Index data on Friday.
- Risk-off flows helped USD gather strength throughout the week.
- Gold prices struggled to recover its losses after breaking below key technical levels.
- Investors await US CPI data ahead of Fed’s policy decisions on September 22.
Spot Gold Technical Weekly Report & Outlook
Following the decline witnessed in the first half of the week, gold’s near-term technical outlook seems to have turned neutral with a bearish bias. In addition to the fact that gold close below both the 100-day and the 200-day SMAs for the fourth straight day on Friday, the Relative Strength Index (RSI) indicator on the daily chart retreated below 50.
On the downside, the initial support is located at $1,790, where the Fibonacci 38.2% retracement of the latest uptrend is located. A daily close below that level could open the door for additional losses toward $1,780 (static level, Fibonacci 50% retracement) and $1,760 (static level).
The initial resistance could be seen in the $1,800/05 area (psychological level, 50-day SMA, Fibonacci 23.6% retracement) ahead of $1,810 (200-day SMA) and $1,815 (100-day SMA).
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