Fundamental
Overview
Gold dropped briefly below
a key support yesterday following the FOMC
decision as the market perceived it as more hawkish than expected.
Overall, apart from some
slight tweaks, the Fed was in line with the market’s expectations, and the
market’s reaction might have been an overreaction. There’s lots of algo-driven
noise during such big events.
The data is what really
matters now as it will decide what the Fed is going to do. It will likely take
just one soft CPI in January to see the market reacting in a dovish was with
real yields falling and gold rallying.
Gold
Technical Analysis – Daily Timeframe
On the daily chart, we can
see that gold fell briefly below the 2600 support
yesterday following the FOMC decision but eventually managed to erase some of
those losses and rise above the key level. The buyers will likely pile in
around these levels to target the 2721 resistance, while the sellers will look
for another break below the 2600 support to increase the bearish bets into the
next major trendline
around the 2400 level.
Gold Technical Analysis
– 4 hour Timeframe
On the 4 hour chart, we can
see that we are still trading inside the range between the 2600 support and the
2721 resistance with the 2660 zone as the mid-level. There’s not much else we
can add here as the buyers will target the 2660 zone first, while the sellers
will look for a break below the 2600 support to gain more conviction for
further downside.
Gold Technical Analysis
– 1 hour Timeframe
On the 1 hour chart, we can
see that we have a minor downward trendline now defining the current bearish
momentum. The sellers will likely lean on it to position for the break below
the support, while the buyers will look for a break higher to increase the
bullish bets into the 2660 zone. The red lines define the average daily range for today.
Upcoming
Catalysts
Today, we get the latest US Jobless Claims figures, while tomorrow we
conclude the week with the US PCE data.
See the video below
This article was written by Giuseppe Dellamotta at www.forexlive.com.
