Unemployment of 3.7% is close to all-time lows, which is significant in the context of rates having risen so high so quickly. Equally, there’s no sign of a significant uptick in unemployment since last year; the rate has been mostly consistent since early 2022.

Overall, there’s no strong pressure on the Fed to start cutting rates at the soonest to avoid a recession or even a ‘necessarily economic slowdown’. That’s certainly positive for the average American and for most investors around the world, but for traders it creates various questions. It’s difficult to see what fundamental factor can push gold much further up as rates are almost certain to remain higher than inflation for the whole year. Equally, it might seem strange that the dollar hasn’t reacted more strongly to recent news of higher rates for longer.

Gold has recovered steadily since the significant drop around inflation on 13 February. Now that the price is within the value area between the 50 and 100 SMAs, it might consolidate for a while before resuming gains around the next important release. There’s no sign of saturation from either the slow stochastic or Bollinger Bands. Although the long-term trend from the weekly chart is upward, on D1 it’s sideways since December.

That makes the most likely scenario in the near future consolidation within a shrinking range. Next week the focus is on second estimate GDP on Wednesday followed by personal consumption expenditures and personal income and spending on Thursday. These probably won’t have as big an effect on markets as inflation or the NFP but traders should remain alert to the possibility of a fakeout upward if the releases are surprising.

Now that both the Fed and the ECB are expected by small majorities to start cutting in June, the playing field for euro-dollar is a bit more level. Although economic conditions in the eurozone are on the whole much more challenging than in the USA, there’s no evidence of a serious recession anywhere in Europe. On the chart, the main potential concern for a possible buyer is that the recent bounce seems a bit too sharp.

At the time of writing, the 50 SMA is still a possibly important resistance which might drive a rejection lower given the size of the current period’s wick; however, completion should be awaited to assess the validity of this idea better. If the price does move down from here, though, there might be a retest of recent lows around $1.07. The most important release affecting the euro next week is inflation on Friday; national inflation from France, Germany and Italy are also coming up on Thursday 29 February and Friday 1 March.