Gold’s action before the NFP and other important events
29 November 2022
Gold against the US dollar (symbol ‘XAUUSD’) is trading in a bull flag formation with the bulls keeping strong for the time being but volatility is deflated in the recent sessions. Price had a sharp increase in the beginning of November mostly due to the underperformance of the US Dollar and resumed the downward movement again on the 16th of November when the greenbuck started making some gains.
‘Latest market expectation for the FED meeting on 14th of December is a double hike at an estimation of 70%. This might not be very good news for the dollar resulting in making gold less expensive for other currency holders and therefore supporting the price of the “yellow metal” at least in the short term.’ says Antreas Themistokleous, market analyst in Exness ‘the Fed Chair Jerome Powell’s speech on Wednesday is drawing the attention of traders seeking more clarity on the central bank’s policy stance.’
According to technical analysis the price resumed its overall bearish movement in the last couple of weeks with the price correnting to the downside and is currently trading around the $1,750 price area. The price is trading in a descending range between the 78.6% and 61.8% of the Fibonacci retracement levels.
In the event that the descending range proves to be a strong one we might see a continuation to the downside with a first point of support around $1,711 price area which consists of the 50% of the Fibonacci retracement level and the 100 day moving average.
If the price resumes its earlier bullish movement we might expect to see some resistance around the $ 1,800 area just above the 78.6% of the Fibonacci and also the psychological resistance of a round number.
Important publications coming out this week like US job openings, manufacturing and non-manufacturing PMI as well as the strong NFP release are expected to create great volatility on all US Dollar pairs and gold is not an exception.