XAU/USD outlook: Gold takes a breather under new record high ahead of Fed rate decision

Slobodan Drvenica Windsor Brokers

XAU/USD

Gold price edged lower in European trading on Tuesday as bulls take a breather after hitting new record high on bullish acceleration in past three days.

Overbought daily studies contribute to a partial profit taking, but dips are likely to be shallow and positioning for fresh push higher in anticipation that Fed will cut interest rates on the policy meeting which concludes on Wednesday.

Markets are likely to reduce speed and hold in quiet mode, expecting Fed’s verdict.

Fresh rise in expectations that US policymakers will opt for more aggressive 50 basis points rate cut adds to strong bullish sentiment and favors scenario of fresh longs on shallow dips for attack at psychological $2600 and possible extension higher.

Initial supports lay at $2560/55 zone guarding more significant $2533/31 supports (10DMA / former all-time high) which should contain deeper pullback.

Res: 2589; 2600; 2614; 2628.
Sup: 2561; 2556; 2531; 2520.

Interested in XAU/USD technicals? Check out the key levels

1. R3 2603.93
2. R2 2596.81
3. R1 2589.7
PP 2582.58
1. S1 2575.47
2. S2 2568.35
3. S3 2561.24

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

AUD/USD hits nine-week lows below 0.7000 on RBA Bullock's remarks

AUD/USD reverses a brief uptick and turns lower to hit nine-week lows below 0.7000 in the European morning on Tuesday, as traders digest cautious remarks from Reserve Bank of Australia (RBA) Governor Michele Bullock during the press conference. Earlier on, the RBA raised the cash rate to 4.60%, as widely expected, leaving the door open to further rate hikes if needed.

USD/JPY consolidates near 157.50 as a bullish USD counters intervention risks

USD/JPY struggles to capitalize on the overnight bounce from a one-week low, consolidating around 157.50 in the Asian session on Tuesday. Trump's concerns about the Japanese Yen's weakness fueled speculation about another US-Japan joint intervention. This, along with the hawkish BoJ, underpins the JPY and caps the currency pair. Meanwhile, rising Fed rate-hike bets and oil-driven inflation fears continue to push US bond yields to multi-year highs, keeping the US Dollar pinned near a two-month high and supporting the pair.