Spot gold turned decrease from its $2,600 report highs following the Fed’s rate of interest reduce occasion!
Are we a chance to leap in XAU/USD’s long-term uptrend?
Let’s take a more in-depth have a look at the 4-hour time-frame:
Gold (XAU/USD) 4-hour Foreign exchange Chart by TradingView
In case you missed it, the Fed had a “Brat summer time” second and stunned some merchants with a 50bps rate of interest reduce on Wednesday. Not solely that, however the “Dot plot” projections additionally pointed to extra price cuts this yr and the subsequent.
Nonetheless, the Fed additionally raised its medium-term rate of interest forecasts, and JPow hinted in his presser that the subsequent price reduce will not be smaller than 50 foundation factors.
That is seemingly why the U.S. greenback remained resilient in opposition to its counterparts regardless of the speed reduce. XAU/USD, which has been having an excellent September to this point, jumped to a brand new report excessive of $2,600 earlier than the bears stepped in.
Keep in mind that directional biases and volatility situations in market worth are usually pushed by fundamentals. In the event you haven’t but achieved your homework on the U.S. greenback and gold, then it’s time to take a look at the financial calendar and keep up to date on each day basic information!
Are XAU/USD bulls simply taking a breather?
We’re taking a more in-depth have a look at the $2,550 space that strains up with the Pivot Level ($2,550) line and the 38.2% Fibonacci retracement of gold’s newest upswing.
If the lengthy wicks on the 4-hour chart result in inexperienced candlesticks and constant buying and selling above $2,550, then XAU/USD might attract sufficient shopping for stress to retest its $2,600 earlier highs.
In the event you’re anticipating a deeper pullback for gold costs, we are able to additionally take into account a potential journey to the $2,525 zone close to the 100 SMA, S1 ($2,514) Pivot Level, 61.8% Fib retracement, and former resistance ranges.
A retracement to the decrease potential assist zone would supply a greater entry worth for individuals who count on XAU/USD to make new month-to-month highs within the subsequent few weeks.
After all, we’re not discounting a bearish flip gaining momentum and resulting in an extended downswing.
Be careful for extra bearish candlesticks and constant buying and selling beneath the mid-channel assist zone which might result in a retest of earlier lows close to $2,500.
Don’t neglect to apply correct threat administration and keep conscious of top-tier market catalysts when buying and selling this one. Good luck!