Interest rates in focus this week – GBP/USD in falling wedge, Gold falling on US data [Video]

I’m Brad Alexander and in today’s Market Blast, let’s take a look at the S&P500 (US500), USDJPY, GBPUSD, and Gold (XAUUSD).

Price action on Gold has fallen from its all-time high of 4 December into this lower trend line.

We had another fall based on USD strength from a better-than-expected Non-Farm Payroll report last Friday.

If we want to sell Gold, we might want to wait for a short rally and wait for our technical indicators, like the stochastic oscillator, to show us a reversal.

When we see such violent moves like this, very often technical indicators like MACD may not be reliable for a while.

If we move out to the daily chart, we see the same indication on the stochastic oscillator.

Of course, we see the same USD strength on almost every pair.

However, all USD pairs, including XAUUSD, will be affected more by the monetary policy of the US Federal Reserve including Wednesday’s Interest Rate Decision and the FOMC Press Conference.

Everyone will be watching for clues as to when the Fed may actually lower Interest Rates, but last week’s employment data indicates that that may not happen soon.

Also, we have a tremendous amount of Economic News this week including Interest Rate Decisions from the SNB, the BoE, and the ECB, all on Thursday.

Tomorrow we see large company Indices from Japan.

If the Fed does want to lower Interest rates, then we will see USD weakness which may justify this Falling Wedge pattern on GBPUSD.

Tomorrow’s Japanese data may not seem like much but the market will be watching all signs from the BoJ.

The Japanese central bank has been rumouring about raising Interest Rates which has given JPY some strength.

This pullback may be the result of government turmoil but we are more interested in the January and April meetings of the bank.

The idea of lowering Interest Rates has helped the US indices and we see the S&P 500 rising above July’s highs.

If we move out to the weekly chart we see that we have some room above to the all-time highs from the beginning of 2022.