The headline CPI for march printed at 8.5% YoY. This number was higher than the Dow Jones forecast of 8.4% and is the fastest paced since December 1981. However, core CPI came in at the expected 6.5%. Gold reacted by shooting up to the R1 pivot (downwards arrow on the right). On a daily scale (the chart on the left), the precious metal is in its bullish area between the upper blue and red bands.
Moreover, the Bollinger bands are narrowing (blue rectangle), suggesting that gold's volatility should increase. The hourly chart also shows bullishness with the EMAs and stochastic crossing upwards (black ellipses). If the stochastic moves into the 80+ area (green rectangle), the precious metal will have an underlying bullish momentum that supports the price.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.