In today's trading session, our focus is on XAUUSD, where we are monitoring a potential selling opportunity around the 2020 zone. Gold, currently in a downtrend, is experiencing a correction phase as it approaches the trend at the 2020 support and resistance area.
Adding a fundamental layer to our analysis, let's delve into the recent Consumer Price Index (CPI) data. Examining the CPI figures from the past few months, we observe a consistent pattern of inflation stability. The most recent data indicates a CPI of 3.4%, slightly surpassing the forecasted 3.2%, and showing a minor decline from the previous month's 3.7%.
Now, considering the potential impact on USD strength, stable inflation can contribute to a stronger US dollar. This is because a stable economic environment, reflected in steady inflation, is often viewed positively by investors. As the USD gains strength, it can put pressure on commodities like gold, which is priced in dollars. Therefore, traders should be mindful of the potential inverse correlation between a strong USD and the value of gold.
Traders are encouraged to incorporate both fundamental and technical analysis when evaluating opportunities in XAUUSD. As always, trade safe.