Forex Marketz Daily Forex News – Fully Markets Update
Primarily thanks to hawkish commentary from the U.S. central bank last week, which shocked the global financial markets, the widely traded spot gold futures contract fell sharply lower as the greenback strengthened.
The U.S. dollar is set to continue its run higher this week as Federal Reserve Chair Jerome Powell will testify before the U.S. Congress. A stronger U.S. currency hurts metal prices. Including gold prices.
Last week, the U.S. central bank made no changes with their monetary policy. However, their monetary policy statement and commentary from Federal Reserve Chair Jerome Powell, during his press conference, were surprisingly hawkish. This boosted the U.S. dollar at the expense of the spot gold contract.
The Federal Reserve Board shocked the financial markets by signaling two rate hikes in 2023. They also opened the door to tapering their monthly asset purchases.
Today, the U.S. Chicago Federal Reserve branch will release their monthly national activity index and European Central Bank President Christine Lagarde will hold a press conference
Daily Spot Gold Technical Analysis (XAU/USD)
Looking at price action on the above XAU/USD spot gold futures daily MT 4 price action chart, the 14 day relative strength index (RSI) is below thirty (30) for the first time since the start of March.
This could mean a correction higher for gold before falling again. The bears are fully in control right now.
Unless gold sees a daily close above the one hundred (100) day simple moving average and key psychological $1,800 per ounce level, the bearish pressure is likely not going to change.
This is also the 50% percent Fibonacci level. The next upside barrier lines up at the 38.2 percent Fibonacci level at $1,825 per ounce. The 200 day simple moving average is in play at $1,835.
On the downside, there is technical support at the 61.8 percent Fibonacci level at $1,770 per ounce. The 29 April low price point lines up at $1,755 and then $1,740 comes into the picture.
