Release of the US CPI report for October at 1:30 pm GMT is a key macro event of the day. Price stability and the labor market are main points of focus for the Federal Reserve while setting policy and as the labor market continues to hold firm, inflation is a place to look for possible hints on potential policy pivot. Report is expected to show slight deceleration in both headline and core price growth. If those expectations are met, inflation will still remain at elevated levels but trend is important, especially when it comes to core inflation as headline gauge has already started to drop.
US CPI report for October (1:30 pm GMT)
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Headline. Expected: 8.0% YoY. Previous: 8.2% YoY
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Core. Expected: 6.5% YoY. Previous: 6.6% YoY
A bigger-than-expected drop in US inflation could boost market positioning towards a Fed pivot. This would, at least in theory, see indices and precious metals catching bid while the US dollar should weaken. Taking a look at the GOLD chart at the H4 interval, we can see that the price of gold started to trade sideways following a recent strong upward impulse. A key support to watch can be found in the $1,705 per ounce area and is marked with previous price reactions as well as the lower limit of the local market geometry. A key near-term resistance can be found in the $1,725 area. Note that the 50-period moving average climbed above the 200-period moving average, painting a "golden cross" pattern (orange circle). While this is a bullish pattern, it surfaces with a significant lag and therefore its significance as a leading indicator is questionable.
Source: xStation5
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