Gold closed the past week near 4165.25 USD/oz, caught between hot US inflation data and a softer dollar. An MQL5 blog analysis advises waiting for confirmation and favors intraday sell setups only in the 4185–4199 zone.
Gold closed the past trading week near 4165.25 USD/oz, according to an XAU/USD weekly outlook on MQL5's Traders' Blogs. The analysis says the Daily structure remains within a corrective bearish phase, with price hovering just above short-term support.
Its primary directive for the week of October 19–23 is to wait for confirmation. Chasing shorts at current levels is, in the author's words, a low-probability, high-risk proposition.
Hot inflation meets a softer dollar
The Federal Reserve's 25 bps rate hike on September 16 lifted rates to 3.75–4.00%. September inflation then came in hotter than consensus: headline CPI rose 0.6% m/m (3.7% y/y), Core CPI increased 0.3% m/m, and PPI surged 1.3% m/m (6.3% y/y). The analysis says persistent price pressures keep hawkish repricing risks alive for upcoming FOMC meetings, capping gold's medium-term upside potential.
However, the US Dollar Index softened by 0.17% to approximately 101.87 during Friday's session. FedWatch probabilities reflected an 83% chance of the Fed holding rates steady in October. The author adds that Brent crude trading around 109–110 USD/bbl brings inflationary risks alongside sporadic safe-haven demand.
Sell setup targets the 4185–4199 premium zone
The analysis labels the macro picture mixed, with a medium-term bearish tilt. Its primary scenario is a sell on rejection in the 4185–4199 zone, after a buy-side liquidity raid near 4199.033 and a bearish market structure shift. The first two targets are 4154.692 and 4130.388.
Invalidation of the bearish thesis comes if H1 and H4 accept above 4217.430. In that case, the alternative scenario shifts focus to long opportunities around ~4259.000 – 4290.000.
Next week's data calendar is light. It lists US Housing Starts and Building Permits on Tuesday, October 20, and US Initial Jobless Claims on Thursday, October 22, at 12:30 UTC.
Source: MQL5: Traders' Blogs
Trading involves risk.
Risk Disclaimer
