CPI FUNDAMENTAL ANALYSISπ
For those TRADING XAUUSD or XXXUSD pairs, here is the play.
14:29, one minute before the number: DO NOTHING.
Why?
CPI is different from NFP. Headline is expected HOT at 3.6 to 3.7%, driven by energy. We have two numbers pulling in opposite directions in one release.
Core is expected COOL at 0.2% for the month. Hot headline is bearish for gold, cool core is bullish for gold. The two numbers cancel each other out before the release, so there is no edge at 14:29. Pure coin flip.
DXY is currently BULLISH
XAUUSD is currently BEARISH, and it is BEARISH on the DAILY TF.
Gold is stuck between 4165 and 4216, every push above 4200 getting sold.
14:30, when the data drops: read CORE first, headline second. A hot headline will not surprise anyone, energy is already known. The surprise lives in core. If core comes in soft at 0.1% or below, gold buys. If core comes in hot at 0.3% or above, gold sells. If core lands in line at 0.2%, chop. That is the risk of CPI, headline and core can point in opposite directions. Keep in mind, there is a HIGHER PROBABILITY for PRICE to spike both sides at 1430pm CAT before going in ONE DIRECTION. Remember, we have two numbers pulling in opposite directions in one release. Headline is expected hot, core is expected cool. BIG MONEY movers ( this includes algo ) trade the headline first, so the first spike goes one way.
Then the real money reads the core and the price reverses the other way. One release, two conflicting signals, so price tags both sides of the range before it picks a real direction.
That is exactly why the first spike at 14:30 is the most dangerous candle of the whole release, and why we wait for the retest.
14:31 onwards: do not chase the first spike. Let it print, let it retest and trade the reaction, not the headline. Soft core, buy the break above 4216 toward 4270. Hot core, sell the break below DAILY key Level of Support toward 4000.
Mixed report, do nothing. And keep size small.
Above all, PRICE ACTION speaks, and it shows it's hand. Follow PRICE ACTION before, and after CPI.
Not investment or financial advice. Your funds are at Risk. Trade responsibly.
