The new week will kick off in a calmly manner, with US and UK markets closed on Monday. The economic calendar, however, will heat up heading into the weekend with the release of Eurozone CPI and US core PCE data- reports that could spark volatility.
The European Central Bank is expected to cut interest rates and unwind its restrictive monetary policy starting in June, res...The new week will start off slowly, as both the US and UK markets will be closed on Monday— the former for Memorial Day and the latter for a bank holiday. Holidays in these financial hubs mean lower trading volume, possibly leading to sluggish price action.
Analysts expect Eurozone inflation to rise to 2.5% y-o-y this month from 2.4% in April, with the core gauge anticipated to remain steady at 2.7%. The slight uptick in the headline metric may not deter the ECB from pulling the trigger next month, but an upside surprise may prompt the institution to adopt a more cautious approach to future easing. In light of these developments, euro FX pairs may be subject to heightened volatility heading into the weekend.
Conversely, if inflation numbers exceed forecasts, interest rate expectations could shift in a hawkish direction, delaying the Fed’s timeline for initiating rate cuts. In this scenario, November or December could become the new baseline for a potential move by the U.S. central bank. Such a development could propel bond yields and the greenback higher, creating a more challenging environment for equities and precious metals.
This article delves into the fundamental and technical outlook for gold, with a specific focus on analyzing price action dynamics and potential scenarios post the release of U.S. PCE data later this week.DailyFXLeveraged trading in foreign currency or off-exchange products on margin carries significant risk and may not be suitable for all investors. We advise you to carefully consider whether trading is appropriate for you based on your personal circumstances. Forex trading involves risk.
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