During Thursday's Asian trading session, the US Dollar Index hovered near 98.40, while spot gold traded around $4,336 per ounce. Investors are bracing for potential market volatility as they await the US CPI data and interest rate decisions from the European Central Bank (ECB) and the Bank of England (BOE).
Spot gold surged by $35.91 (0.84%) on Wednesday to close at $4,338.04 per ounce, driven by signs of weakness in the US labor market and heightened geopolitical tensions between the US and Venezuela.
Key events to watch on Thursday include the US CPI report, the Philadelphia Fed Manufacturing Index, and central bank meetings. The US core CPI is expected to rise 0.3% month-on-month and 3.0% year-on-year.
The BOE is anticipated to cut rates by 25 basis points to 3.75%, while the ECB is likely to hold rates steady. ECB President Christine Lagarde will hold a press conference following the decision.
**Technical Analysis Highlights:**
**Gold:** Gold is attempting to break above $4,400 per ounce. A sustained move above this level could pave the way for a rally toward $4,450–$4,500.
**US Dollar Index:** The index faces resistance near 98.50. A failure to breach this level could see it decline toward 97.50–97.00. Only a sustained break above 98.50–99.00 would negate the bearish outlook.
**EUR/USD:** After testing 1.1702, the pair rebounded and may consolidate within the 1.17–1.18 range until a breakout occurs.
**EUR/JPY:** The pair found support at 181.57 and could test 184 if it remains above 182.
**USD/JPY:** The pair rebounded from 154.51 but faces resistance at 156–157. It may trade within 154–158 until the Bank of Japan’s meeting, where a 25-bps rate cut is widely expected.
**USD/CNY:** A drop below 7.045 could lead to further declines toward 7.025–7.00.
**AUD/USD:** A sustained drop below 0.66 may push the pair toward 0.655–0.650.
**GBP/USD:** Weak UK CPI (3.3% vs. 3.5% expected) fueled BOE rate cut expectations, sending the pair to 1.3311. Consolidation within 1.330–1.345 is likely before a breakout.
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