During Wednesday's (January 14) Asian afternoon session, the U.S. Dollar Index hovered near 99.20, while spot gold traded around $4,636 per ounce. Market participants are bracing for significant volatility, with their focus squarely on the upcoming U.S. Retail Sales and Producer Price Index (PPI) data releases. In a recent report published Wednesday, the Kshitij Consultancy Service team provided a forward-looking analysis on the trajectories of gold, the U.S. Dollar Index, EUR/USD, EUR/JPY, USD/JPY, AUD/USD, GBP/USD, and USD/CNY.
At 21:30 Beijing Time on Wednesday, the U.S. Census Bureau is scheduled to release the November Retail Sales data. A survey from an authoritative media outlet indicates that U.S. Monthly Retail Sales for November are projected to increase by 0.4%, following a flat reading in October.
Often dubbed the "Terror Data" due to its substantial impact on financial markets, the U.S. Retail Sales figures are poised to influence the movements of assets like the U.S. dollar and gold.
Valeria Bednarik, Chief Analyst at FXStreet, noted that gold has initiated a fresh record-breaking rally, with prevailing market risk sentiment potentially fueling further gains for the precious metal. The release of U.S. November Retail Sales data on Wednesday presents another critical dataset likely to sway dollar demand.
Also due at 21:30 Beijing Time on Wednesday is the U.S. November Producer Price Index (PPI), with forecasts pointing to a 0.3% monthly increase and a 2.7% annual rise.
FXStreet analyst Lallalit Srijandorn highlighted that Wednesday's U.S. Retail Sales and PPI data will command market attention. These reports could offer crucial clues regarding the future path of U.S. interest rates. Any signs of resurgent inflation in the U.S. might provide a short-term boost to the dollar, simultaneously exerting downward pressure on dollar-denominated gold prices.
The Kshitij Consultancy Service team has published its views on the movements of gold and major currency pairs, with the key points summarized below:
Gold
Gold prices remain resilient. There is potential for the metal to advance towards the $4,650-$4,700 per ounce range in the coming trading sessions. Key U.S. data releases scheduled for today include Retail Sales, PPI, the Current Account, and Existing Home Sales data.
U.S. Dollar Index
The U.S. Dollar Index has edged higher, buoyed by the U.S. December Consumer Price Index (CPI) meeting expectations with a 0.3% monthly increase, reinforcing the view that the Federal Reserve may maintain interest rates at current levels. The team maintains its expectation for the Dollar Index to climb towards the 100.00-100.50 range.
EUR/USD
EUR/USD has declined, aligning with the team's outlook. As long as the pair remains below 1.17, it could test target levels near 1.160-1.155 in the short term.
EUR/JPY
EUR/JPY has broken above the 185 level. If this breakout is sustained, the pair could test resistance near the 186-187 zone.
USD/JPY
USD/JPY has risen as anticipated. Provided it holds above 158, further testing of the 160-162 area is possible in the near term.
USD/CNY
USD/CNY traded steadily yesterday. The current view remains that as long as the pair stays below 7.00, it could decline towards 6.95 or even 6.90 in the coming weeks.
AUD/USD
AUD/USD continues to fluctuate within the 0.6650-0.6750 range. Overall, the bearish outlook persists as long as the pair remains below 0.68, but a decisive break below 0.66 is needed to confirm further downside. Until then, the 0.6650-0.6570 range is likely to hold.
GBP/USD
GBP/USD climbed to 1.3494 yesterday but failed to sustain the gains and began to retreat. The pair is currently trading near the lower boundary of the 1.3550-1.3400 range. A breakdown below this range could potentially lead to a further decline towards 1.33 or lower levels.
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