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

US CPI – Gold

All eyes are on Friday's US CPI report, which will dictate the Federal Reserve’s September 16 rate decision. While August’s 162,000 payroll rebound raised the chances of a rate hike to 59%, central bank leaders stress that inflation data will decide the outcome. A higher-than-expected inflation figure would lock in a quarter-point increase and boost the US dollar, while a cooler reading could keep interest rates on hold and weaken the greenback.

Meanwhile, gold fell toward 4,400 as higher bond yields and rate-hike expectations weighed on non-yielding metals, leaving gold prices equally dependent on the incoming CPI data. A sell-off beneath the 50-day simple moving average (SMA) at 4,350 and, more importantly, below the 4,310 strong support would increase speculation of further decreases toward 4,200.  

ECB rate decision – EUR/USD

Markets broadly expect the European Central Bank to raise borrowing costs by a quarter-point to 2.5% this Thursday as rising energy expenses push inflation beyond 3%. While investors anticipate another potential move by December, economists expect this to be the final increase to avoid damaging economic growth, especially with wage expansion slowing and broader inflation remaining muted. The euro's reaction will depend heavily on Christine Lagarde’s press conference, any signal of a December hike could lift EURUSD, whereas a focus on economic risks could push the single currency lower.

Currently, EUR/USD is fluctuating within the 20- and 200-day SMA, slightly above the 1.1600 handle. A successful climb beyond it would endorse another bullish wave, heading toward the 1.1710 barrier. On the other hand, a slide below the 50-day SMA may switch the short-term outlook to negative.

Escalating US-Iran conflict drives oil higher – WTI Crude Oil

Rising Middle East conflict drove crude oil past 92.00 level today, extending last week’s momentum as reciprocal strikes between American and Iranian forces sparked fears of enduring regional supply bottlenecks. US naval forces targeted Iranian oil tankers following missile launches directed at warships, prompting Tehran to declare restricted shipping routes near the critical Strait of Hormuz waterway. In response, OPEC+ chose to halt its monthly output increases by keeping October production levels unchanged, even as prolonged transit hazards forced the cartel to lower its current-year global demand growth forecast to 580,000 barrels daily.

WTI crude oil is ticking marginally higher above the 92.00 region with the next strong resistance coming from the 94.60 barrier. A step up could open the way for a touch of the 99.00 psychological mark, raising the likelihood of a bullish outlook. Alternatively, only a drop below the 200-day SMA at 80.40 could endorse the bearish outlook.