AUD/USD dropped to weekly lows near 0.6650. US CPI weighed on Fed's interest rate cut bets. Australian trade surplus surprised to the upside in November. AUSD/USD rapidly faded Wednesday's advance and refocused on the downside, briefly reaching fresh weekly lows in the 0.6650/45 band on Thursday. The CPI-driven bounce in the greenback put the risk-associated universe under further pressure and forced the Aussie dollar to give away the earlier uptick to the 0.6720 zone, recorded in the wake of firmer-than-expected trade balance results in the domestic economy. On the latter, the trade surplus in Australia widened to A$11.437B in November (from A$7.660B), with Exports up 1.7% vs. the previous month and Imports shrinking by 7.9% on a monthly basis. Looking at the short-term picture, dynamics around the greenback are predicted to keep dictating the sentiment around the pair, with speculation of interest rate cuts by the Federal Reserve taking centre stage. The latest release of the US CPI, however, poured cold water over investors' prospects of rate cuts as soon as March. On the RBA side, recent inflation figures tracked by the RBA's Monthly CPI Indicator suggest a pause by the central bank at its February gathering, despite the labour market remaining tight and with a scarce probability of much more cooling in the upcoming months, all leaving the RBA as one of the last central banks to (potentially) trim rates this year. To the prospects of the central bank, investors should add the developments in the Chinese economy as another key driver for the price action of the Aussie dollar, as the post-pandemic rebound in that economy still remains elusive. Looking at Friday's calendar in Oz, the housing sector will be at the centre of the debate with the publication of Home Loans and Investment Lending for Homes, both gauges for the month of November. AUD/USD short-term technical outlook The continuation of selling pressure might push the AUD/USD to the 2024 low of 0.6640 (January 5) before hitting the 200-day SMA at 0.6581. The December 2023 low of 0.6525 comes next seconded by the transitory 100-day SMA of 0.6504. If bulls regain the upper hand, the focus will transfer to the December 2023 peak of 0.6871 (December 28), which will appear before the July 2023 high of 0.6894 (July 14) and the June top of 0.6899 (June 16). If the pair breaks out of this range, the psychological level of 0.7000 will be the next to be monitored. Still on the daily chart, a golden cross has emerged after the 55-day SMA crossed above the 200-day SMA in recent sessions, which could be indicative that a short-term rebound could be shaping up. According to the 4-hour chart, the significant conflict zone is about 0.6650. If this zone is breached, there are no noticeable disagreement levels until 0.6525 and 0.6452. Furthermore, the MACD stays in the negative zone, indicating the persistence of a bearish bias, while the bounce of the RSI to the vicinity of 40 allows for some very near term rebound. The bullish trend, on the other hand, may encounter first resistance at the 55-SMA at 0.6736, which is seen as the last line of defense before the last high at 0.6870. View Live Chart for the AUD/USD

The acceleration of the US Producer Price Index (PPI) is anticipated to continue. In fact, the US Bureau of Labor Statistics predicts the inflation tracked by PPI to edge a tad higher in the last month of 2023, following the previous flat reading and October's 0.4% monthly decline. The release of the PPI report has been growing in significance almost pari passu with the publication of monthly inflation figures gauged by the CPI and PCE, all against the backdrop of the current data-dependent stance from the Fed and in light of increasing speculation of rate cuts at some point early in the spring. The Headline PPI is expected to rise 0.1% MoM and 1.3% from a year earlier. In addition, Core PPI is seen rising at a monthly 0.2% and 1.9% over the last twelve months. So far, anticipation for PPI appears reasonable, especially when considering the uptick in the Consumer Price Index (CPI) data released on Thursday. Another positive surprise in the release could lend transitory support to the US Dollar, although the real impact on the Fed's decision-making process appears blurred (to be optimistic).

XAU/USD Current price: 2,016.72 The December United States Consumer Price Index was higher than anticipated. CPI figures spurred risk aversion, as they mean "higher for longer" rates. XAU/USD pierced its weekly low and aims to test buyers' determination around $2,000. Stronger than anticipated United States (US) inflation figures boosted the US Dollar ahead of Wall Street's opening, putting mild pressure on XAU/USD. The US Dollar traded with a soft tone ahead of the announcement as investors hoped for upbeat figures. However, the Consumer Price Index was up 3.4% YoY in December, higher than the previous 3.1% and the 3.2% expected. The core annual reading came in at 3.9% vs the 3.8% anticipated, while the monthly increase was 0.3%. The US Dollar benefited from a risk-averse environment, as the data suggests the Federal Reserve (Fed) would have to maintain rates higher for longer, as policymakers anticipated multiple times. Higher price pressures weighed down the odds for a rate cut in March. As a result, stocks edged lower, with Wall Street trading in the red, and government bond yields ticked higher. XAU/USD short-term technical outlook XAU/USD trades near a fresh weekly low of $2,013.55, and the daily chart hints at another leg lower. The bright metal was unable to recover beyond a mildly bullish 20 Simple Moving Average (SMA), which rejected advances for a third consecutive day. At the same time, the Relative Strength Index (RSI) indicator maintains a firmly bearish slope at around 44. More neutral, the Momentum indicator heads nowhere around its midline, while the 100 and 200 SMAs converge around $1,962. In the near term, and according to the 4-hour chart, the risk skewed to the downside. Technical indicators head south almost vertically within negative levels, while XAU/USD develops below all its moving averages. Furthermore, the 20 SMA has crossed below the longer ones, providing dynamic resistance at around $2,029.00. Further slides are to be expected with a break below the $2,000 threshold on the table. Support levels: 2,016.60 1,998.65 1,987.20 Resistance levels: 2,029.00 2,040.30 2,052.30  

EUR/USD holds comfortably above 1.0950 after closing in positive territory on Wednesday. Technical buyers could take action if the pair manages to stabilize above 1.0990-1.1000. Markets await December Consumer Price Index data from the US. Following a quiet European session, EUR/USD gathered bullish momentum in the second half of the day and closed in positive territory above 1.0950 on Wednesday. The pair holds its ground early Thursday and trades within a touching distance of 1.0990-1.1000 resistance area.  Improving risk mood caused the US Dollar (USD) to come under selling pressure during the American trading hours. As Wall Street's main indexes continued to push higher after opening with marginal gains, the USD Index turned south and erased a large portion of the gains it recorded on Tuesday. Inflation in the US, as presented by the change in the Consumer Price Index (CPI), is expected to edge higher to 3.2% on a yearly basis in December from 3.1% in November. The Core CPI, which strips volatile food and energy prices, is forecast to rise 0.3% on a monthly basis to match November's reading. A smaller-than-anticipated increase in the monthly Core CPI could further weigh on the USD and help EUR/USD extend its rebound. On the other hand, a hot core inflation figure could provide a boost to the USD with the immediate reaction. According go the CME FedWatch Tool, markets are pricing in a 67% probability that the Federal Reserve (Fed) will lower the policy rate by 25 basis points in March. This market positioning suggests that the USD faces a two-way risk heading into the event. EUR/USD Technical Analysis The Relative Strength Index (RSI) indicator on the 4-hour chart climbed toward 60, reflecting a build-up in bullish momentum. On the upside, 1.0990-1.1000 (100-period Simple Moving Average (SMA), psychological level) aligns as key resistance area. In case EUR/USD rises above that region and starts using it as support, 1.1050 (mid-point of the ascending regression trend channel) and 1.1100 (psychological level, static level) could be set as next bullish targets. On the downside, supports are located at 1.0960 (Fibonacci 23.6% retracement of the latest uptrend), 1.0930 (200-period SMA) and 1.0900 (psychological level, lower-limit of the ascending channel).

Good Morning! Dollar Index is holding above 102 while Euro could rise towards 1.10 or higher while above 1.0870-1.09. EURJPY and USDJPY have declined from immediate resistances of 160 and 146 respectively. USDCNY has sipped and could now be headed towards 7.10/12. Aussie could head towards 0.6750 or higher while Pound could rise towards 1.28 or higher in the near term. USDRUB could test 89-88 before moving higher. EURINR could be headed towards 91.50. USDINR needs to rise from 82.90 to rise towards 83.20. Release of US CPI data would be crucial to watch today. The US Treasury yields have inched up slightly. We retain our view of seeing more rise from here before the overall downtrend resumes. The US CPI data release today will be important to watch. The German yields continue to move up as expected. There is room to rise more from here before reversing lower again. The 10Yr GoI continues to move down as expected. Bearish view is intact, and the yield can fall more. The 5Yr GoI is nearing the lower end of its range. We expect the range to break on the downside and the yield to fall more. Dow Jones is moving up within its sideways range. A break on the upside, if seen, can target key resistance at 38000-38200. DAX lacks a strong follow through rise. This keeps alive the danger of breaking below its support of 16600-16500. Nikkei continues to move up breaking above its resistance and is bullish toward 36000. Shanghai is inching lower and looks vulnerable to break below its immediate support and fall further in the near term. Crude prices remain range bound. Gold and Silver remain vulnerable to fall while below the resistance at 2060 and 23.50/23.80 respectively. Copper is heading up towards its immediate resistance. There is scope for a break above the resistance while copper stays above 3.75. Natural Gas has declined as expected and has room to fall further to 2.8-2.75. Key focus is on the release of US CPI data today. Visit KSHITIJ official site to download the full analysis

Gold price finds support once again near $2,020, as all eyes remain on US inflation data.  The US Dollar loses further ground despite the recent advance in US Treasury bond yields. Gold price stays between 21-day SMA and 50-day SMA, awaits a range breakout. Gold price is attempting a bounce in Asian trading early Thursday, having found fresh demand again near the $2,020 region. Gold buyers are retesting their luck, as all eyes turn toward the US Consumer Price Index (CPI) inflation data due at 13:30 GMT.    Gold price braces for volatility on US CPI report Asian traders are witnessing some cautious optimism, following a positive close on Wall Street overnight. However, they prefer to stay on the sidelines ahead of the all-important US CPI data, which is likely to significantly impact the market's pricing of the US Federal Reserve (Fed) interest rate cuts this year. The US CPI is expected to rise at an annual pace of 3.2% in December, up slightly from a 3.1% increase in November. The Core CPI inflation is set to decline to 3.8% YoY in the reported period versus 4.0% in November. Meanwhile, the monthly CPI is seen increasing 0.2% in the same period vs. a 0.1% rise in November while the Core CPI inflation is likely to hold steady at 0.3% MoM in December. Sticky shelter price inflation could likely outweigh the recent decline in Oil prices, fuelling the uptick in the monthly CPI print. A hotter-than-expected monthly CPI figures may help push back against the Fed rate cuts in the first quarter of 2024, providing a fresh lift to the US Dollar at the expense of the non-interest-bearing Gold price. On the other hand, Gold price could extend the recovery beyond $2,050 if the inflation data comes in softer-than-expected and reverberates dovish Fed expectations, cementing a March Fed rate cut. Markets are currently pricing in a 66% probability that the Fed will slash rates in March. In the meantime, markets' prudence is expected to leave Gold price gyrating in a familiar range, despite the recent weakness in the US Dollar. On Wednesday, the upside attempts in Gold price were capped by resilient US Treasury bond yields, as the risk rally in global stocks reduced the inflows in the US Treasury bonds. Gold price technical analysis: Daily chart The intraday technical outlook for Gold price remains the same, as the bright metal is likely to remain confined between the 21-day Simple Moving Average (SMA) and 50-day SMA at $2,045 and $2,016 respectively in the run-up to the US CPI showdown. The 14-day Relative Strength Index (RSI) indicator is flirting with the midline, supporting Gold buyers alongside the 100- and 200-day SMA Bull Cross confirmed last Friday. If the rebound sustains on soft US inflation readings, the immediate resistance is seen at the 21-day SMA at $2,045. The next bullish target for Gold price is envisioned at Friday's high of $2,054, above which doors reopen for a test of the $2,100 barrier. On an upside surprise to the US CPI data, the initial support is seen at the $2,015 confluence, where the 50-day SMA and Monday's low coincide. A daily closing below the latter is critical to resuming the downtrend toward the $2,000 mark.