XAU/USD Set for further downside

I'm not an experienced commodity trader and the tools I use are generally for volume based instruments so take these this a grain of salt. That being said it strangely does hold up to historic data and provides a tradable structure.

Technical outlook:
Since we broke 1800 in July I have been anticipating seeing gold around 1500's again. Where we have previous 2020 strong support zones to challenge and price structure supports that theory. The recent momentum move led to a attempt to retest 1800 but we saw a rejection before it reached. This post is a bit delayed so shorts are somewhat risky but expect a possible push up today in anticipation to FOMC minutes and other economic data today. This might give us selling opportunities in sweet spots if 1800 gets touched. If we get a strong close on 1800 that might lead to price pushing above for the meantime till we see what FOMC will hold.

Macro Outlook:
So many articles have been saying this past week that due to the inflation beat and CPI figure that the Fed will contemplate reversing interest rates. I strongly disagree with this outlook. Yes we beat inflation figures marginally and CPI was not bad, but it wasn't good either. The realistic view is that the economy is still facing high inflation and production is stagnating and or decreasing. Consumer spending is also down in many sectors which reflects more on the true inflation we are feeling that isn't shown with core inflation figures. There is still a lot of uncertainty. The fed knows this and have iterated in the past that even if we see core inflation come down, they will not slow down interest rates till they hit targets. The only question now is how much they will project further hikes, but reducing it is not on the table in my opinion. This means the USD will stay strong and will continue putting pressure on all instruments as investors would rather hold on to cash.

Summary:
If price falls look for bounces on 1700-1680, although I do not expect much support there.
Look for weakness on rally's.
Expect volatility today.
If we move above 1800 after FOMC be careful not to FOMO around the 1850-1870 area, it would be wiser to wait for a confirmation and look for pullbacks.
My downside targets: 1675, 1620. 1580 and then the grand 1500.
My upside targets: 1775, 1800, 1810 and 1866

Am I overlooking something? Let me know in the comments please :)

Comment:

Technical update:

Still in consolidation. Chair Powel speech is tonight so watch for volatility and possibly breaks in a direction. As shown on the chart there are two major hurdles to get past @1800 and ~@1840. If those fail to give us good selling signs then I have little doubt they would move on 1900 fast.

Macro Update:
Some FOMC members implies inflation is not coming down fast enough, saying;
"data releases that pointed to inflation moving
down more slowly than previously expected."

and are still uncertain,

"...many participants remarked that,
even though the tightening of monetary policy had
clearly influenced financial conditions and had had notable effects in some interest rate-sensitive sectors, the
timing of the effects on overall economic activity, the
labor market, and inflation was still quite uncertain, with
the full extent of the effects yet to be realized. "

Many members are clearly still hawkish on the general economy, with most economies now going for interest runs I believe they will keep on tightening into next year.

Will see what Daddy Powel has to say.

Trade active:

Multiple deviation resistance to break + price halting at major deviation + at PA resistance.

First short. Seems like a relief rally due to technicals, highly likely this momentum can carry higher so I'm doing a small position with a tight stop.

SL ~1815
1st TP ~1730
2nd TP ~1660

Comment:

Comment:

Late update, busy week.

Added second short @1807. SL @ 1825.

First short entry set to BE. Good Reactions from dynamic deviations. First TP still ~1730.

Update next week Monday or if things get wild.