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Technical outlook: Gold, GBP/USD, EUR/USD [Video]

US CPI and PPI – Gold

US CPI and PPI will be the highlight events this week. October CPI is due on Tuesday, followed by PPI on Friday. Consensus points to a 0.3% monthly increase in headline CPI and 0.2% in core CPI, with annual inflation expected to rise towards 3.9% from 3.7% in September. The latest employment report showed 165,000 new jobs in October, unemployment at 4.1% and positive revisions to previous months. The resilient labour market has increased expectations of a December Federal Reserve rate increase, with market pricing indicating a probability of 78%.

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Gold has reclaimed the 4,100 area, which now appears to be a significant resistance level, as it is close to the short-term downtrend line. A pullback could send investors towards the 4,025 support region, ahead of the one-year low at 3,870. However, a sustained break above the downtrend line would increase speculation of a bullish correction towards 4,200 and 4,240. The MACD and RSI indicators are showing limited momentum. The strong US employment report and firmer dollar have increased the downside risk for gold, but softer CPI or PPI data could reverse that pressure through lower Treasury yields and reduced expectations of further Federal Reserve tightening.

UK GDP – GBP/USD

The UK will publish its preliminary third-quarter GDP estimate and September’s monthly GDP data on Thursday. Current expectations centre on quarterly growth of approximately 0.7%, compared with 0.5% in the second quarter. A stronger outcome would support the view that UK activity remained resilient through the summer and could validate the Bank of England’s more hawkish stance. The MPC voted 8–1 to raise the Bank Rate by 25 basis points to 4.00%, while one member preferred a 50-basis-point increase. The Bank also expects inflation to reach around 5% by mid-2027, although it stressed that future policy is not on a pre-set path.

GBP/USD remains technically mixed but has received support from the BoE’s decision and hopes that closer UK–EU cooperation in agri-food supply chains could improve the UK’s economic outlook. The pair is trading near the 1.3390 area, and a successful climb above the 50.0% Fibonacci retracement at 1.3400, measured across the decline from 1.3675 to 1.3140, could trigger another rally towards the 61.8% Fibonacci retracement at 1.3470 and the 1.3500 round number. Stronger-than-expected GDP could reinforce sterling’s positive momentum, while a weak release would challenge expectations of further BoE tightening.

Eurozone GDP – EUR/USD

Eurozone third-quarter GDP will be updated on Friday through the second flash estimate. The initial estimate showed quarterly growth of 0.4% and annual growth of 1.3%, following quarterly growth of 0.6% in the second quarter. The revision will be assessed alongside France’s budget dispute and the ECB succession process. France’s National Assembly rejected the revenue section of the 2027 budget on 4 November, leaving the government dependent on negotiations with the Senate and further political compromise. The rejection has increased scrutiny of France’s fiscal position, debt-servicing costs and the risk of renewed political instability.

The ECB succession process is now an additional consideration for EUR/USD. Christine Lagarde will leave the presidency on 7 February 2027, and Spain and the Netherlands have nominated Pablo Hernández de Cos and Klaas Knot, respectively. The Eurogroup was scheduled to review the candidacies on 9 November, although no immediate appointment was expected. EUR/USD is consolidating within the 1.1100–1.1270 range, with initial resistance near the 20-day simple moving average (SMA) at 1.1190. A sustained break above this resistance could open the way towards 1.1270, while a break below 1.1100 would signal renewed downside pressure. Strong US inflation would add to that risk through a stronger dollar.

Author

Melina Deltas, CFTe

Melina joined Trading Point in December 2017 as a Market Analyst. She can clearly communicate market action, particularly technical and chart pattern setups.

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