Gold: Signs of bullish exhaustion ahead of the Fed


  • Gold is looking heavy with Friday's candle signaling buyer exhaustion.
  • A close below $$1,338 would validate Friday's candle with a long upper wick.
  • Markets to continue paring back rate cut bets ahead of Wednesday's Fed rate decision.

Gold's rally seems to have run its course with signs of bullish exhaustion emerging on technical charts ahead of Wednesday's FOMC (Federal Open Market Committee) rate decision.

The yellow metal is currently trading at $1,339 per Oz, representing 0.14 percent losses on the day, having hit a high of $1,358 on Friday - a level last seen in April 2018.

Notably, the rise to 14-month highs was short-lived with prices closing largely unchanged at $1,341 on Friday. Essentially, the yellow metal created a candle with long upper shadow on Friday - a sign of buyer exhaustion. 

A bullish-to-bearish trend change would be confirmed if gold prices validate Friday's candlestick with a close below $1,338 today. That looks likely as Friday's upbeat US retail sales dispelled the need for an immediate rate cut. The market, therefore, could continue to pare back its July rate cut expectations ahead of the Fed, keeping the US dollar better bid.

The US central bank is expected to keep rates unchanged at 2.5% this week. While recent soft economic data have boosted rate cut expectations, Goldman Sachs believes the markets have overpriced rate cuts and the central bank will stand pat for the rest of the year.

Technical levels

XAU/USD

Overview
Today last price 1338.96
Today Daily Change -2.97
Today Daily Change % -0.22
Today daily open 1341.93
 
Trends
Daily SMA20 1307.94
Daily SMA50 1294.09
Daily SMA100 1301.28
Daily SMA200 1268.78
Levels
Previous Daily High 1358.2
Previous Daily Low 1338.2
Previous Weekly High 1358.2
Previous Weekly Low 1319.99
Previous Monthly High 1306.9
Previous Monthly Low 1266.35
Daily Fibonacci 38.2% 1345.84
Daily Fibonacci 61.8% 1350.56
Daily Pivot Point S1 1334.02
Daily Pivot Point S2 1326.11
Daily Pivot Point S3 1314.02
Daily Pivot Point R1 1354.02
Daily Pivot Point R2 1366.11
Daily Pivot Point R3 1374.02

 

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD mute just above 1.1200, waiting for a signal

The EUR/USD pair is stable and confined to a tight intraday range, unable to run, despite upbeat EU inflation and disappointing US housing figures. Dismal market’s mood backing the greenback without boosting it.

EUR/USD News

GBP/USD bounced from fresh yearly lows at 1.2381

Sterling remains depressed amid Brexit jitters pushing investors away from the currency. UK data did not help as inflation met the market’s expectations in June.

GBP/USD News

USD/JPY consolidates in a range, comfortably above 108.00 handle

Reviving safe-haven demand underpins JPY and exerts some pressure. Renewed weakness in the US bond yields further weighed on the USD. The downside remains limited amid tempered Fed rate cut expectations.

USD/JPY News

Gold: Yellow metal gets intraday boost above the 1,400.00 figure

Gold is currently consolidating gains in a triangle above its main daily simple moving averages (DSMAs). The market is trading above the 1,400.00 mark and the main SMAs suggesting bullish momentum in the medium term.

Gold News

Forex Today: US dollar corrects, US-Japan eye a trade deal, and Bitcoin bounces

US dollar reverses a part of Tuesday’s US retail sales data-led rally. US-Japan are working towards a trade deal by September. Bitcoin recovers, but remains below the 10k mark.

Read more

MAJORS

Cryptocurrencies

Signatures


  •  
  •  
  •  
  •  
  •