Published: 19 December 2025,07:06
Daily Market Analysis New
*Dollar index edges lower on softer-than-expected U.S. inflation data.
*Gold briefly hits record highs before a technical pullback.
*Market eyes upcoming U.S. Core PCE Price Index for further direction.
Market Summary:
The dollar index, tracking the greenback against a basket of six major currencies, slipped yesterday following the release of disappointing U.S. inflation data. The Bureau of Labor Statistics reported that annual inflation slowed to 2.7% in the latest reading, down from 3.0% previously and missing market expectations of 3.1%. This marked the slowest underlying U.S. inflation pace since early 2021, in a report affected by the recent government shutdown.
The weaker-than-expected inflation, combined with softer employment data, has reinforced concerns about the current state of the U.S. economy. Treasury yields edged lower as market expectations for Fed rate cuts gained traction, reflecting rising investor caution over near-term economic performance.
Gold, supported by the declining dollar, briefly surged to record highs before retreating, as the market digested the technical challenges of breaking long-standing resistance. The pullback is likely a technical correction, with investors weighing the softer inflation backdrop and the prospect of additional monetary easing.
Looking ahead, attention turns to the upcoming U.S. Core PCE Price Index, a key gauge of inflation closely monitored by the Federal Reserve. The release later this week could provide a crucial signal for both the dollar and gold, shaping market expectations for further Fed action.
Technical Analysis
DXY, H4:
The dollar index is trading lower following a retracement from resistance at 98.55, currently hovering near the key support level of 98.10. Market participants remain cautious ahead of today’s U.S. Core PCE Price Index release, which could provide a fresh directional catalyst.
In the short term, the index is likely to consolidate within the 98.10–98.55 range until the data is released. Technical indicators show a neutral bias: MACD is flat, and RSI at 50 sits near the midline, supporting a period of sideways movement.
A decisive breakout above 98.55 could signal a potential rebound toward 99.05, while a confirmed break below 98.10 may extend losses toward 97.55.
Resistance Levels: 98.55, 99.05
Support Levels: 98.10, 97.55
GOLD, H4:
Gold is trading lower after testing record highs, currently resting near its upward trendline. Technical indicators point to bearish pressure: MACD shows increasing bearish momentum with a death cross, while RSI at 49 sits below the midline, reinforcing the downside bias.
A confirmed breakdown below the trendline or triangle pattern could push gold toward 4,315, extending the recent correction. Conversely, if the trendline holds and momentum reverses—particularly after today’s Core PCE data—gold may rebound and challenge resistance at 4,350, with a further potential target of 4,400.
Resistance Levels: 4,350, 4,400
Support Levels: 4,320, 4,280
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