Gold Price In Significant Uptrend, Fed Rate Decision Next
Aayush Jindal
Key Highlights
Gold price climbed higher recently and broke the $1,240 resistance against the US Dollar.
There was a break above a major bearish trend line with resistance at $1,242 on the 4-hours chart of XAU/USD.
The US Housing Starts in Nov 2018 increased from the last revised reading of 1.217M to 1.256M (MoM).
Today, the Fed Interest Rate Decision will be announced, and the central bank is expected to increase rates from 2.25% to 2.50%.
Gold Price Technical Analysis
After finding a strong buying interest near the $1,232 zone, gold price started a fresh upward move against the US Dollar. The price rallied and broke the $1,240 and $1,244 resistance levels.The 4-hour chart of XAU/USD indicates that the price found support near $1,232 and the 100 simple moving average (red, 4-hours). There was a sharp bounce above the 50% Fib retracement level of the last decline from the $1,250 swing high to $1,232 swing low.Moreover, there was a break above a major bearish trend line with resistance at $1,242. The price even surpassed the 76.4% Fib retracement level of the last decline from the $1,250 swing high to $1,232 swing low, opening the doors for more gains above the $1,250 resistance.If the current trend remains intact, the price could extend gains towards the $1,255 level and the 1.236 Fib extension level of the last decline.On the downside, an initial support is near the $1,244 level, below which the price could test the $1,242 support zone. Overall, as long as the price is above the 100 SMA, it remains in an uptrend and it could continue to rise towards $1,255 or $1,260.However, today’s Fed Interest Rate Decision might impact the market sentiment for gold. Moreover, the current recovery in major pairs like EUR/USD and GBP/USD could face a strong resistance if the fed increases rates from 2.25% to 2.50%. On the other hand, disappointment may perhaps lead to a sharp dollar selling.
Economic Releases to Watch Today
UK Consumer Price Index Nov 2018 (YoY) – Forecast +2.3%, versus +2.4% previous.
UK Core Consumer Price Index Nov 2018 (YoY) – Forecast +1.8%, versus +1.9% previous.
Fed Interest Rate Decision - Forecast 2.50%, versus 2.25% previous.
Canadian Consumer Price Index Nov 2018 (MoM) – Forecast -0.2%, versus +0.3% previous.
Canadian Consumer Price Index Nov 2018 (YoY) – Forecast +1.9%, versus +2.4% previous.
The 4-hour chart of XAU/USD indicates that the price found support near $1,232 and the 100 simple moving average (red, 4-hours). There was a sharp bounce above the 50% Fib retracement level of the last decline from the $1,250 swing high to $1,232 swing low.Moreover, there was a break above a major bearish trend line with resistance at $1,242. The price even surpassed the 76.4% Fib retracement level of the last decline from the $1,250 swing high to $1,232 swing low, opening the doors for more gains above the $1,250 resistance.If the current trend remains intact, the price could extend gains towards the $1,255 level and the 1.236 Fib extension level of the last decline.On the downside, an initial support is near the $1,244 level, below which the price could test the $1,242 support zone. Overall, as long as the price is above the 100 SMA, it remains in an uptrend and it could continue to rise towards $1,255 or $1,260.However, today’s Fed Interest Rate Decision might impact the market sentiment for gold. Moreover, the current recovery in major pairs like EUR/USD and GBP/USD could face a strong resistance if the fed increases rates from 2.25% to 2.50%. On the other hand, disappointment may perhaps lead to a sharp dollar selling.