Gold Price Forecast: XAU/USD sitting tight over the abyss ahead of US CPI

Gold price is getting set for the key event this week.
US Consumer Price Index's countdown has begun.

Gold decoupled from the US Dollar's trajectory on Monday, sinking at the same time as the greenback as investors get set for this week's key event in the US Consumer Price Index. However, if the CPI data were to be a dovish outcome, then the Gold price stands to benefit and should the bears be in the market heading into the data, a short squeeze could eventuate as illustrated below.

The price is currently on the front side of the bearish trend following the breakout of the symmetrical triangle on Monday as the following analysis illustrates:

Gold H1 charts

Zoomed in ...

Gold dovish and hawkish biases on US CPI

The price is currently on the front side of the bearish trend following the breakout of the symmetrical triangle on Monday. The move was a continuation of shorts from Thursday's sell-off, Day 1 shorts. The market has since picked up more supply and tested down low in the 100 pip box near $1,850.

There are prospects of a move lower from the 50% mean reversion of the prior bearish impulse while on the front side of the dynamic resistance and ahead of the US CPI data. A target for the bulls would be the opening balance highs near $1,865.

Meanwhile, on an uber-hawkish outcome of the data, the $1,825 target is exposed on a break of $1,850:

If this were to play out off the bat, it would complete that prior analysis thesis as posted over the past few weeks in a running commentary on the market structure:

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.