- The bias remains bullish despite the current retreat.
- The ECB should bring high volatility later today.
- After its strong growth, a retreat was natural.
The gold price dropped after hitting a fresh yearly top, just short of an all-time high. The precious metal is trading at $2,035 at the time of writing.
–Are you interested to learn more about Islamic forex brokers? Check our detailed guide-
Fundamentally, the XAU/USD extended its growth on the dovish FOMC. It has rallied even though the ISM Services PMI and ADP Nonfarm Employment Change came in better than expected yesterday.
As expected, the Federal Reserve increased the Federal Funds Rate from 5.00% to 5.25%. However, it could stop further rate hikes in the next meetings. In my opinion, only higher-than-expected inflation in the upcoming period could force the FED to take action again.
Later today, the ECB represents a high-impact event and should bring sharp movements in gold again. The Main Refinancing Rate is expected to be increased from 3.50% to 3.75%.
However, the ECB Press Conference could shake the markets. Furthermore, the US will release the Unemployment Claims, Trade Balance, Prelim Unit Labor Costs, and Prelim Nonfarm Productivity.
Tomorrow, the US economic figures should move the rate. The Nonfarm Employment Change is expected at 180K versus 236K in the previous reporting period.
The Unemployment Rate could jump from 3.5% to 3.6%, while Average Hourly Earnings may report a 0.3% growth again.
Gold price technical analysis: Corrective downside to key levels
From the technical point of view, the XAU/USD returned to retest the near-term support levels. Today, it has climbed as much as $2,063, registering a new higher high.
–Are you interested to learn more about Thailand forex brokers? Check our detailed guide-
However, it has failed to hit the $2,075 all-time high. After its amazing growth, a retreat was natural. As you can see on the hourly chart, the price registered only a false breakout through the warning line (wl1) of the ascending pitchfork.
It has dropped below the R3 ($2,043) and through the upper median line (uml). The weekly R2 ($2,026) represents the next downside target.
The median line (ml) and $2,011 represent major downside obstacles. The bias remains bullish as long as it stays above these support levels.
Looking to trade forex now? Invest at eToro!
68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
Share
