Last week, the Fed hiked interest rates by 25 bps as expected
leaving the policy statement unchanged. The market was eager to get some clues
on the next policy moves but was disappointed as Fed Chair Powell just
reaffirmed their data dependency and kept all the options on the table. The US Jobless Claims beat
expectations once again and sent hawkish vibes across the markets eventually
weighing on Gold. The following day though, the US PCE and the Employment Cost Index missed
forecasts giving Gold some support.
Gold Technical Analysis –
Daily Timeframe
Gold Daily
On the daily chart, we can see that Gold rejected
the 1984 resistance as the
sellers stepped in with a defined risk above it to target a new low. The buyers
though, leant on the red 21 moving average as
expected to target again a breakout of the resistance.
Gold Technical Analysis – 4
hour Timeframe
Gold 4 hour
On the 4
hour chart, we can see that the selloff following the beat in the US Jobless
Claims ended at the daily 21 moving average, and the price bounced into the
1964 resistance zone where we had also the 50% Fibonacci retracement level
and the 4 hour red 21 moving average for confluence. The
sellers stepped in there with a defined risk above the resistance to target the
break below the 1934 support.
Gold Technical Analysis – 1
hour Timeframe
Gold 1 hour
On the 1 hour chart, we can see that the
buyers will need to break above the 1964 resistance zone to get more conviction
and pile in to target the break above the 1984 level. The last line of defence
will be the 1934 support, as a break below that level is likely to give the
sellers even more control and increase the bearish momentum.
Upcoming Events
This week we
will have many important economic data, beginning tomorrow with the US ISM
Manufacturing PMI and the US Job Openings. Moving on to Wednesday, we will see
the latest US ADP report. On Thursday, the market will be focused on the US
Jobless Claims and the US ISM Services PMI. Finally on Friday, we will get the
latest NFP report. Given the Fed’s openness to more rate hikes, strong data
should weigh on Gold and vice versa in case the data disappoints.