Fundamental Overview
Despite the spike lower triggered by the last
FOMC decision, gold didn’t extend the fall and remained confined in the range between the 2600 support and the 2721 resistance.
The FOMC decision was perceived as more hawkish than expected but apart from some slight tweaks, the Fed just met the market’s pricing.
The data is what really matters now as it will decide what the Fed will do next. We have the NFP report this week and the market might err on the defensive side, so it wouldn’t be surprising to see another retest of the support.
The main event though, will be the US CPI release next week. Soft data should trigger a dovish market reaction with real yields falling and gold rallying. Conversely, another hot report will likely send gold lower with the sellers targeting the 2500 level.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that gold continues to trade inside the range between the 2600
support and the 2721 resistance. The buyers will likely keep on stepping in around the support to position for a rally into the resistance, while the sellers will look for a break lower to target a drop into the major
trendline around the 2400 level.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price recently rallied into the middle of the range around the 2660 level but got snapped back down as the sellers piled in to position for a break below the support. The buyers will need to break the 2660 zone to open the door for a rally into the 2721 resistance next.
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 keep on leaning on it to position for the break below the support, while the buyers will look for a break higher to look for an extension above the 2660 zone. The red lines define the
average daily range for today.
Upcoming Catalysts
Tomorrow, we get the US ISM Services PMI and the US Job Openings data. On Wednesday, we have the US ADP and the FOMC Minutes. On Thursday, we get the latest US Jobless Claims figures. On Friday, we conclude the week with the US NFP report.
See the video below
This article was written by Giuseppe Dellamotta at
www.forexlive.com.
