Yesterday, Gold sold off following the slightly more hawkish than expected Fed where we got some pushback against a rate cut in March both from the statement and Fed Chair Powell. Overall, the big picture hasn’t changed much as the Fed is still preparing for a rate cut cycle given the easing in inflation back to their 2% target, but they just want to see some more data. Moreover, in case the data starts to surprise to the downside, especially on the labour market side, they will be ready to cut in March anyway.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that Gold has recently broke through the key trendline that was defining the downtrend and it has opened the door for a rally into the 2080 resistance zone. The buyers will now look for dip-buying opportunities on the lower timeframes while the sellers will need some key breakouts to the downside to gain back control.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price bounced on the key support zone around the 2015 level and after the breakout above the trendline, extended the rally into the 2055 level. We recently got a pullback into the upward trendline where we had also the red 21 moving average for confluence. The buyers stepped in with a defined risk below the trendline to position for a rally into the resistance. The sellers, on the other hand, will want to see the price breaking below the trendline to invalidate the bullish setup and position for a drop back into the 2015 support.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the price action around the trendline. There’s not much to do here other than waiting for another pullback into the trendline or a break below it. Some aggressive buyers might look into buying a break above the recent swing level around the 2050 level but from a risk to reward perspective the trendline remains the best spot for new long positions.
Upcoming Events
Today we get the latest US Jobless Claims figures and the ISM Manufacturing PMI. Tomorrow, we conclude the week with the US NFP report. Strong data is likely to weigh on Gold while weak figures should give it a boost.
