It is worth noting that after the release of US CPI data, federal funds rate futures showed that the market's expectations for the Federal Reserve to relax its policy in 2020 increased.

Forex Sky Eye APP News: On Tuesday (January 14), the U.S. Department of Labor released the latest consumer price index report. It is worth noting that after the release of US CPI data, federal funds rate futures showed that the market's expectations for the Federal Reserve to relax its policy in 2020 increased. According to a report from the U.S. Department of Labor, the US CPI monthly rate in December grew by 0.2%, expected to grow by 0.3%, and the previous value increased by 0.3%. The core CPI monthly rate increased by 0.1%, and expected to grow by 0.2%. The US CPI annualized rate in December increased by 2.3%, the highest since October 2018, with expectations and previous values ​​increasing by 2.1%.

In this regard, some institutions commented that the potential monthly inflation pressure in the United States has declined. In addition, the US unseasonally adjusted CPI annual rate in December was 2.3%, the highest level since October 2018. This may allow the Fed to keep the benchmark interest rate unchanged at current levels at least until the end of this year.

Dailyfx commented that although the Fed attaches more importance to inflation levels measured by the PCE price index, CPI and PCE prices are highly correlated, so the latest CPI report shows that the inflation pressure in the United States is rising, which may tilt the Fed's neutral policy scale towards the interest rate hike.

previously stated in an article that the unexpected negative news of the US non-agricultural market last week disappointed the market, and also made the CPI and PPI pay extremely high attention this week. After all, employment and inflation data are key references for the Federal Reserve to adjust its monetary policy.

Currently, the Federal Reserve maintains a wait-and-see attitude, and emphasizes that rising inflation is a necessary condition for interest rate hikes. Since the non-farm data weakened last week, if there is another unexpected situation in this week's inflation data, it is not ruled out that the market will have a bad view. The data in the next 1-2 months will be unfavorable, and the Federal Reserve will still consider cutting interest rates in the future, which will have a huge impact on the market trend.

It is worth noting that the US non-farm accident was lower than expected last week, and coupled with the previous US manufacturing data, US economic growth once caused market concerns. Previously, dailyfx said that as the US economic data deteriorated, it was unrealistic to discuss whether the Fed would raise interest rates in 2020, and the market began to bet that the bank would become increasingly loose in the future.

Market trend: After the release of the US CPI data, the US dollar maintained its rebound momentum, hitting a high of 97.58 during the day, and the euro/dollar fell, with a low of 1.1103; after the short-term rise in spot gold, it soon gave up the gains and has now returned below 1545.

USD: The daily chart shows that the US dollar index continues to challenge the attempt to break through the 97.50 line of resistance. If the breakthrough is made, it may usher in further upward space. However, it should be noted that the upward will face the key resistance area of ​​the downward trend line (97.70) and 97.80 resistance since October 2019. If it cannot break through this resistance area, the index still has the risk of restoring the decline since October 2019.

Of course, if the short-term is blocked at 97.50 again, it also means the risk of the index reaching its peak. Therefore, considering that the technical perspective of the US dollar will be limited, this will be beneficial to the trend prospect of gold, but once the US dollar index rises beyond the 97.70-80 area, the US dollar will usher in a further upward prospect, which will put pressure on the gold prospects accordingly.

Gold: The daily chart shows that gold held the low of last Thursday with the support of the 20-day moving average of 1535, and may usher in a rebound correction in the short term, but the high of 1563 last Wednesday may constitute an important resistance to limit the upward space, so it is expected that gold may enter the consolidation range of 1540-1563.

and if it breaks up to 1563, it may usher in a further rebound space, and it may point to levels such as 1570 and 1580. On the other hand, if gold effectively breaks below 1540 and 1535 in the future, it will usher in a further correction space.