During Tuesday's (January 13) Asian afternoon session, the US Dollar Index hovered near 98.90, while spot gold traded around $4601 per ounce. The market's focus is squarely on the upcoming US Consumer Price Index (CPI) report, anticipated to trigger significant volatility. The Kshitij Consultancy Service team released a fresh analysis on Tuesday, providing a forward-looking perspective on the trends for gold, the US Dollar Index, EUR/USD, EUR/JPY, USD/JPY, AUD/USD, GBP/USD, and USD/CNY.
The US Dollar Index declined on Monday, pressured by escalating attacks from the Trump administration on the Federal Reserve, which sparked concerns over the central bank's independence. The index fell by 0.3%, marking its largest single-day drop in approximately three weeks.
Spot gold surged nearly 2% on Monday, briefly breaking through the $4600 per ounce level to set a new historic high. Uncertainty fueled by reports of a criminal investigation by the Trump administration into Fed Chair Jerome Powell drove investors towards safe-haven assets.
Spot gold closed Monday's session up by $87.96, a gain of 1.95%, settling at $4597.05 per ounce. During the day, it reached a record high of $4630.28 per ounce.
The US December Consumer Price Index (CPI) report is scheduled for release on Tuesday at 21:30 Beijing Time.
Economists forecast that the US December CPI will show a year-on-year increase of 2.7%, with a projected month-on-month rise of 0.3%.
Regarding core inflation data, the US December core CPI is expected to show a year-on-year increase of 2.7% and a month-on-month increase of 0.3%.
The Kshitij Consultancy Service team has written an analysis on the movements of gold and major currency pairs. The main points are as follows:
Gold
Gold prices have broken above $4600 per ounce and could potentially continue their ascent towards the $4650-$4700 per ounce range in the coming trading sessions.
US Dollar Index
As long as it holds above the support zone near 98.75-98.50, the US Dollar Index still has the potential to rise towards the 100.00-100.50 level. US CPI and new home sales data are due for release today.
EUR/USD
EUR/USD tested the 1.1697 level before pulling back. As long as it remains below 1.17, the pair still has the potential to move towards the target zone of 1.160-1.155.
EUR/JPY
EUR/JPY is currently trading near the upper end of the 182-185 range. A decisive break above 185 is needed to test resistance near the 186-187 area.
USD/JPY
USD/JPY has finally broken above 158, driven by speculation that Japan's Liberal Democratic Party might dissolve the lower house and call a snap election in February. If USD/JPY can sustain above 158, it could potentially advance further towards the 160-162 range in the coming weeks.
USD/CNY
As long as it continues to trade below 7.00, USD/CNY could potentially decline further towards 6.95, or even 6.90, in the coming weeks.
AUD/USD
AUD/USD is currently consolidating within the 0.6650-0.6750 range. While the outlook remains bearish below 0.68, a break below 0.66 is needed to confirm further downside. Until then, the 0.6650-0.6570 range may hold.
GBP/USD
GBP/USD initially dipped to a low of 1.3389 but quickly rebounded. Currently, the 1.3400-1.3550 range is holding well. A decisive break outside either end of this range is needed to clarify the next directional move.
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