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Gold weekly analysis: The USD in under pressure

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TVC:GOLD   CFDs on Gold (US$ / OZ)
The dollar has posted its worst weekly performance in five months as it closes out the week.

China's gross domestic product (GDP) is higher than expected is at the top of all of the other happenings this week.

We will be keeping an eye on various data points throughout the week.

It was the largest weekly loss in the general index of the US dollar since August of last year when it closed the trading session on Friday, the 14th of January, at levels of 95.14, after testing its lowest level in two months at 94.60 midweek, as the US dollar ignored all the news that supports the speed with which the US Federal Reserve is tightening policy. Because of his monetary policy , which includes raising US interest rates more quickly during the current year and raising expectations that what will raise interest rates four times during the current year rather than three times as previously expected, interest rates are expected to be submitted four times during the current year.


At the beginning of the week, statements by US Federal Reserve Chairman Jerome Powell reinforced these expectations, as Powell stated in his testimony before Congress that the US Federal Reserve must raise interest rates quickly to counteract the effects of accelerating inflation .


According to the most recent figures, the consumer price index in the United States of America increased at an annual rate of 7 percent in December, compared to 6.8 percent in the previous reading, in line with expectations for the fastest rate of inflation growth in 40 years. In November, the consumer price index increased at an annual rate of 6.8 percent, compared to 6.8 percent in the previous reading.


The dollar did not benefit in any way from all of this, and despite the positive news that dominated most of last week's sessions for the US dollar , the dollar continued to decline sharply. However, I believe this can be explained by the beginning of the year and the construction of new centers, especially given the high expectations of pricing an opportunity greater than 90 percent. Moreover, according to the FedWatch CME Group tool, what will raise the interest rate in March, and it will be presented a total of four times during the current calendar year, starting in March.


One of the most recent data released last week was the December retail sales data from the United States, which came in below expectations and disappointed as sales fell by 1.9 percent in December, raising concerns about the economy and rising inflationary pressures on consumers spending.



Aas fundamentally the USD is under pressure, so the gold still has chances to go upside in the coming days. Check out the H4 chart to better understand.




What is it that the markets are looking forward to this week?



Several important economic reports are expected to be released during the sessions of the current week, and the markets are anticipating them. We began the day with data from China's growth and retail sales, which were released during the Asian session, as well as minutes from the Central Bank of Japan's meeting, inflation data from Canada and the United Kingdom, labor market data from Australia and the United Kingdom, and manufacturing data from the United States of America.



Data released by the Chinese National Bureau of Statistics in the Asian session today, Monday, showed that the country's gross domestic product (GDP) increased by 4 percent in the fourth and last quarter of 2021, exceeding expectations of growth of approximately 3.7 percent.



On the other hand, retail sales fell short of expectations, with annual sales growth slowing to 1.7 percent, down from 3.9 percent in November and expectations of 3.8 percent in December.



On the other hand, industrial production increased by approximately 4.3 percent in December, compared to a growth of 3.8 percent in November, exceeding expectations of a gain of 3.7 percent, while the rate of investment in fixed assets increased by approximately 4.9 percent.



The Bank of Japan is featured prominently on the front page.



The Bank of Japan is expected to announce its monetary policy tomorrow, Tuesday, during the Asian session, with expectations indicating that the Bank of Japan will maintain its monetary policy and interest rates at -0.10 percent.
The sharp rise in the value of the Japanese yen over the past week may explain why the Bank of Japan has hinted that it may impose strict measures shortly, particularly in light of the rise in inflation in Japan, which is in line with the global trend.


On the other hand, Japanese bond yields saw significant increases last week, with the 10-year bond yield reaching its highest level in more than a year on concerns that the Bank of Japan will tighten monetary policy shortly.



We will keep an eye on various data points throughout the week.



Today, Monday will be a trading holiday in the United States observant of Martin Luther King Day. At the same time, manufacturing sales and the Bank of Canada survey of business outlook will be released from Canada in the late afternoon and evening.

During the Asian trading session on Tuesday, the Bank of Japan will announce its monetary policy , while during the European trading session, we will be looking at data from the British labor market, the ZEW index from Germany, and the Eurozone, and during the American trading session, we will be looking at the Empire Estate manufacturing index from the United States of America.


Thursday's economic calendar includes inflation data from the United Kingdom in the European period and Canada in the American session and statements from Bank of England governor Mark Carney at the end of the American session. On Wednesday, inflation data will be released in European and American sessions.


What will monitor Thursday's labor market data from Australia (unemployment rate and change in employment) in the Asian session? At the same time, the European region will release the final inflation reading in the European period - in the American session, the Philadelphia manufacturing index, weekly unemployment benefits, and home sales will be removed, among other things.


The final session of the week is on Friday. The Bank of Japan meeting minutes will be released during the Asian session, and we will be keeping an eye on retail sales in the United Kingdom and Canada during the European and American sessions, respectively.

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