Weekly technical outlook – Gold, EUR/USD, USD/CAD [Video]

US CPI – Gold

Gold has started the week on a negative note as traders brace for another crucial US inflation report while keeping a close eye on the rapidly deteriorating geopolitical backdrop in the Middle East, with Israel and Iran marking their most serious escalation since April’s temporary truce.

Still, for financial markets, the main event remains Wednesday’s US CPI release. Headline inflation is expected to accelerate to 4.2% y/y in May from 3.8% previously, while core CPI is forecast to tick slightly higher to 2.9%. Following last week’s upbeat nonfarm payrolls report, another upside surprise in inflation could further strengthen the narrative that the Fed may need to keep rates steady for longer or even consider a rate hike before year-end.

Technically, the precious metal remains trapped in a short-term bearish trend after extending its four-month correction below its 200-day SMA. Yet, sellers may need confirmation below 4,200 to stretch toward 4,000 as momentum indicators approach oversold territory. Besides, investors have set their CPI projections comfortably above previous readings, increasing the risk of softer-than-expected data.

ECB rate decision – EUR/USD

EURUSD is another victim of the strengthening US dollar. In the eurozone, the spotlight will fall on Thursday’s ECB policy meeting, where markets overwhelmingly expect a 25bps rate cut. Since the move is already largely priced in, traders will likely focus less on the decision itself and more on the tone of President Lagarde’s press conference and the central bank’s guidance on potential future tightening.

That may prove challenging for the euro as the eurozone faces sluggish growth, with the Q1 contraction likely to have been a blip, leaving the ECB with limited flexibility. Unless policymakers signal back-to-back rate increases, EURUSD may continue to trade within the bearish structure that has been in place since mid-April. The next target might be the 1.1400 region once the bears clear the 1.1500 psychological mark.

BoC rate decision – USD/CAD

The Bank of Canada is widely expected to keep interest rates unchanged on Wednesday despite sticky inflation. Although recent employment figures showed some stabilization, the unemployment rate remains elevated, while slowing growth and uncertainty surrounding North American trade relations continue to cloud the broader outlook for the Canadian economy.

At the same time, the divergence between a relatively resilient US economy and a softer Canadian backdrop has continued to support USDCAD, helping the pair extend last week’s strong bullish rally.

Technically, USDCAD is testing its 2026 top around 1.3945-1.3965. However, a sustained move above the psychological 1.4000 barrier might be necessary for a bullish continuation toward the November 2025 high near 1.4140 as momentum indicators are approaching overbought zone.