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Current Setup The latest US CPI report did not deliver a major surprise for financial markets, with both the headline and core inflation prints meeting expectations. The consensus forecasts for the July US CPI had been for headline CPI to come in at 3.4% YoY (prior 3.5%), while the core CPI was expected at 2.5% year-on-year (prior 2.6%). The in-line report means that there is no material need to change the current Federal Reserve policy narrative. Fed policymaker Beth Hammack had indicated on Monday that raising rates once would do nothing for the US economy, adding that any benefits from a hawkish tilt has to come from multiple rate hikes. With the US CPI not doing much to alter expectations, investors now have to focus on next month's employment and inflation data, as well as the upcoming business activity indicators. For both gold and the EUR/USD, the in-line prints mean that there is no material catalyst to cause a decisive USD repricing. Gold: CPI removes the immediate inflation shock Gold is up by 1.52% on the day, maintaining the week's trajectory pre-CPI. With no pressure on US bond yields, gold will keep trading within the context of the geopolitical de-escalation narrative as the greenback keeps reeling from last week's dismal NFP data. Gold remains highly sensitive to: US real yields Fed expectations US dollar direction Geopolitical risk Gold: Technical Outlook The bias on gold remains cautiously bullish. The CPI data leaves the yellow metal's direction subject to US bond yields, geopolitics, and USD sentiment. 4452 remains the next upside target, and if this barrier is breached, a move towards the 4509 high of 4 June 2026 cannot be ruled out. Fig 1: Gold chart (4-hr) showing key price levels post-CPI (snapshot: 12 August 2026) This upside move is only invalidated of the 4382 support is breached via profit-taking or a retracement. In this case, we will see support levels at 4314 (10 August low) and 4213 (22 June 2026 high) forming the next downside targets. EUR/USD: no fresh catalyst after limited CPI surprise The pair traded around 1.15 just before the release of the CPI data, as traders sought for evidence that US inflation was cooling enough to warrant a more dovish Fed. The in-line result means there was no major catalyst either to the upside or downside, as there was nothing on which to make any changes to the Fed outlook. US CPI → Fed expectations → Treasury yields → USD → EUR/USD That leaves the EUR/USD more sensitive to the following drivers: Treasury-yield direction Fed/ECB communication Eurozone economic data ECB expectations Broader US Dollar sentiment The bias for EUR/USD remains constructive on the back of dollar weakness from last week's dismal NFP, as well as a lack of safe-haven appeal as the Middle East geopolitical situation remains in de-escalation. If the core inflation print came in much higher than expected, the markets would have repriced Fed expectations towards a more restrictive, hawkish end of the spectrum. This would have been deemed USD-positive. But this was not the case. Consequently, the Euro remains on course to consolidate its recent gains versus the greenback. But the lack of a downside surprise also means that the Euro would have to look elsewhere for a bullish catalyst. In the near term, the most likely source would be geopolitics and US bond yields. EUR/USD Technical Outlook The ascending trendline remains the dynamic support for recent price action. A bounce from here will have to test and break past the 1.1577 (7 August high) and 1.1621 (15 June high) resistance levels to continue the uptrend towards the 1.1671 resistance formed by the 29 May 2026 high. Fig 2: EUR/USD (4-hr chart) showing key price levels post-CPI (snapshot: 12 August 2026) On the flip side, a breakdown of the trendline makes the 1.1506 support (8 June/11 June lows) available as the next downside target. If this barrier is breached, the next downside target lies at 1.1462 the 3/14 July highs).