Gold, Silver, EUR/USD Technical Analysis: Inflation, Jobs Data, and Market Implications

The US dollar index started the year with a brief dip but quickly resumed its upward trend, supported by the Fed’s hawkish stance. The central bank has signaled only two quarter-point rate cuts for 2025, focusing on inflation risks linked to President Trump’s tariff and tax policies. Strong economic data and persistent inflation pressures have further boosted the US dollar, creating headwinds for gold (XAU) and silver (XAG). The upcoming employment data on Friday will play a key role in influencing the US dollar and, consequently, the gold and silver markets. November’s report showed strong job growth, with the economy adding 227k jobs, recovering from October’s weak 12k increase—the lowest since December 2020. The NFP and unemployment rate data are observed in the chart below.

If Friday’s jobs report confirms strong growth, it could reinforce the Fed’s hawkish stance. A robust labor market would likely sustain dollar strength, limiting the upside potential for gold and silver prices.

Eurozone CPI and Fed Policy Shape EUR/USD Outlook

Moreover, the Eurozone’s December CPI data is scheduled for Tuesday. This data will be a key focus for EUR/USD. The ECB’s decision in December to cut rates further contrasts sharply with the Fed’s plan to maintain higher rates. ECB President Lagarde outlined a neutral rate range of 1.75%-2.5%, suggesting the potential for additional rate cuts.

Cooling inflation in the Eurozone could strengthen expectations for aggressive ECB easing, which may put further downward pressure on the euro. This apparent policy divergence between the ECB and the Fed will likely keep bearish sentiment on the euro intact.

EUR/USD reflects this policy divergence and remains under pressure as the US dollar strengthens. The pair is particularly vulnerable if Eurozone inflation data points to further declines. A strong US labor market could boost dollar gains, potentially driving EUR/USD closer to parity.

On the other hand, unexpected hawkish signals from the ECB or weaker-than-expected US data could offer short-term relief for the euro. Traders will closely watch Tuesday’s CPI release and Wednesday’s FOMC minutes for more precise directional signals.

Gold (XAU) Technical Analysis

Gold Daily Chart – Symmetrical Triangle

The daily chart for gold shows that the price is approaching the apex of a symmetrical triangle and is poised for a breakout. This week’s NFP data release will provide further direction for the gold market. However, the overall trend remains positive, with the price holding above the red-dotted trendline at $2,550.

Additionally, the RSI remains above the mid-level, indicating positive momentum. A breakout above $2,720 could propel gold prices further to the upside.

Gold 4-Hour Chart – Consolidation

The 4-hour chart for gold shows that the price is trading within a neutral zone, highlighted by the orange area. This neutral zone is defined by the $2,720 and $2,580 levels. A breakout from this range will provide further direction. However, last week’s positive price action has formed a double bottom on the 4-hour chart, indicating potential upward momentum in the short term.

Silver (XAG) Technical Analysis

Silver Daily Chart – Support at Bull-Bear Line

The daily chart for silver shows that the price is consolidating at the bull-bear line, just below the 200-day SMA. Silver’s breakout above $29.80 is required to resume its upward trend.

The bull-bear line and the downward-sloping trendline have formed a falling wedge pattern, which indicates positive momentum. A breakout above $32.50 would likely extend the upward momentum in silver prices.

Silver 4-hour Chart – Double Bottom Pattern

The 4-hour chart for silver shows that the price has formed a descending broadening wedge pattern and a double bottom within this wedge. A breakout above $31 would confirm the continuation of the upward trend. Conversely, a break below $27.80 could lead to further downside before the next potential upside move.

EUR/USD Technical Analysis

EUR/USD Daily Chart – Bearish Pressure

The daily chart for EUR/USD shows that the pair remains under strong downward pressure. This pressure is driven by the strength of the US dollar, which has broken above the 107 trading range.

Although the pair reverses slightly from strong support, the bearish pressure will continue as US dollar strength persists. The upcoming NFP and eurozone CPI data will further guide the pair’s next direction.

EUR/USD 4-Hour Chart – Descending Channel

The 4-hour chart shows that the pair is trading within a descending channel and has reached the lower support of this channel around the $1.02 area. The price attempts to rebound higher; however, the black dotted trendline indicates strong bearish pressure on the EUR/USD pair.