Gold Technical Analysis – Awaiting the data for the next major move

Fundamental
Overview

Despite the spike lower triggered
by the last FOMC decision, gold didn’t extend the fall and remained
confined in the range between the 2600 support and the 2721 resistance.

The FOMC decision was
perceived as more hawkish than expected but apart from some slight tweaks, the
Fed just met the market’s pricing.

The data is what really
matters now as it will decide what the Fed will do next. We have the NFP report
this week and the market might err on the defensive side, so it wouldn’t be
surprising to see another retest of the support.

The main event though, will
be the US CPI release next week. Soft data should trigger a dovish market reaction
with real yields falling and gold rallying. Conversely, another hot report will
likely send gold lower with the sellers targeting the 2500 level.

Gold
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that gold continues to trade inside the range between the 2600 support
and the 2721 resistance. The buyers will likely keep on stepping in around the
support to position for a rally into the resistance, while the sellers will
look for a break lower to target a drop into the major trendline around the 2400 level.

Gold Technical Analysis
– 4 hour Timeframe

On the 4 hour chart, we can
see that the price recently rallied into the middle of the range around the
2660 level but got snapped back down as the sellers piled in to position for a
break below the support. The buyers will need to break the 2660 zone to open
the door for a rally into the 2721 resistance next.

Gold Technical Analysis
– 1 hour Timeframe

On the 1 hour chart, we can
see that we have a minor downward trendline now defining the current bearish
momentum. The sellers will likely keep on leaning on it to position for the
break below the support, while the buyers will look for a break higher to look
for an extension above the 2660 zone. The red lines define the average daily range for today.

Upcoming
Catalysts

Tomorrow, we get the US ISM Services PMI and the US Job Openings data. On
Wednesday, we have the US ADP and the FOMC Minutes. On Thursday, we get the
latest US Jobless Claims figures. On Friday, we conclude the week with the US
NFP report.

See the video below

This article was written by Giuseppe Dellamotta at www.forexlive.com.