Key Take-Aways
- The $1,865 resistance area proved difficult for the gold price to overcome.
- On the 4-hours chart, a crucial negative trend line is developing with resistance close to $1,862.
- After the US CPI release, the EUR/USD and GBP/USD exchange rates jumped lower before reversing.
- In January 2023 (YoY), the US Consumer Price Index rose 6.4% rather than 6.5%.
Price Technical Analysis of Gold
The gold price battled against the US dollar to begin a comeback wave above $1,870. The bulls made a few efforts to clear $1,865 and $1,870, but they were unsuccessful.
The XAU/USD 4-hours chart shows that the price dropped significantly following the announcement of the US CPI data. According to the US Bureau of Labor Statistics, the US CPI fell from 6.5% in December to 6.4% in January on an annual basis.
Below the support levels of $1,865 and $1,860, there was a sharp fall. Price spikes even occurred below $1,850. The bulls, though, were active close to the $1,842 area.
Price rose above $1,850 after a brief decline. It is still seeing significant opposition close to $1,865. On the same chart, a significant negative trend line with resistance close to $1,862 is also developing.
The price may move toward the 200 simple moving average if it breaks through the $1,870 zone and the 100 simple moving average (red, 4-hours).
An early support for the downside is located close to the $1,850 mark. The gold price may struggle to hold above the $1,835 region below the next significant support, which is close to the $1,842 level. The price of gold could decline toward the $1,820 support under the scenario mentioned.
When examining EUR/USD, the pair likewise experienced a drop below the 1.0750 mark before rising again. Near 1.0800, it is still having difficulties.
Economic News To Trade Today
- Forecast for US retail sales in January 2023 (MoM) is -0.2%, down from the previous +0.6%.
- Forecast for the UK Consumer Price Index for January 2023 (YoY) is down +10.3% from the prior +10.5%.
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