Hello traders and welcome to the grand finale event of the year.
Jackson Hole
We are nearing the Jackson Hole speech by Jerome Powell, where he will lay the groundwork of the FED's monetary policy & strategy. Jackson Hole is extra important this year, as traders and investors are expecting a change of strategy by the FED for the coming year.
The FED-cartel
Powell himself has been mildly dovish, but his sidekick Bullard has been vocally hawkish in his interviews. Usually the FED-President uses his sidekick to send a signal to the market before the real decisions will be announced. Clarida & Kaplan on the other hand had a change of heart by suggesting to wait with tapering until the effects of the new delta-variant become more clear. The situation can't get more confusing.
What to look out for?
Traders will be looking out for clues from Powell on tapering the unprecedented bond-buying program. Most likely Powell will remain vague (as we know him), but he might start giving a timeschedule on when he plans to start slowing down the bond-buying with the first 40 billion a month. The expectation is that the FED will remain supporting the market with 80 billion dollars per month (currently 120 billion per month) until end of next year.
Technicals
We are nearing the 1815-1820 (1st major resistance) and the 2nd major resistance (1830-1835) in a bearflag formation that broke on Wednesday. Next to the bearflag there is also a Head & Shoulders and an H4 Bearish Gartley pattern developing that is aiming for the $1725 major support. We are also still below the daily deathcross and this is a strong bearish signal for gold, while the DXY is operating in a daily golden cross.
Buy or Sell?
The big question for many. My personal opinion is to stay out of the market until the situation calms down and see how the market will digest the event after the weekend. While this is still a gamble, I do think the gold bears are in charge below 1830. If you want to take the gamble, then I would say a short has a higher risk:return ratio currently.
Tomorrow we will get the answer. Good luck and may the blue pips be on your side.
Cesaro
Jackson Hole
We are nearing the Jackson Hole speech by Jerome Powell, where he will lay the groundwork of the FED's monetary policy & strategy. Jackson Hole is extra important this year, as traders and investors are expecting a change of strategy by the FED for the coming year.
The FED-cartel
Powell himself has been mildly dovish, but his sidekick Bullard has been vocally hawkish in his interviews. Usually the FED-President uses his sidekick to send a signal to the market before the real decisions will be announced. Clarida & Kaplan on the other hand had a change of heart by suggesting to wait with tapering until the effects of the new delta-variant become more clear. The situation can't get more confusing.
What to look out for?
Traders will be looking out for clues from Powell on tapering the unprecedented bond-buying program. Most likely Powell will remain vague (as we know him), but he might start giving a timeschedule on when he plans to start slowing down the bond-buying with the first 40 billion a month. The expectation is that the FED will remain supporting the market with 80 billion dollars per month (currently 120 billion per month) until end of next year.
Technicals
We are nearing the 1815-1820 (1st major resistance) and the 2nd major resistance (1830-1835) in a bearflag formation that broke on Wednesday. Next to the bearflag there is also a Head & Shoulders and an H4 Bearish Gartley pattern developing that is aiming for the $1725 major support. We are also still below the daily deathcross and this is a strong bearish signal for gold, while the DXY is operating in a daily golden cross.
Buy or Sell?
The big question for many. My personal opinion is to stay out of the market until the situation calms down and see how the market will digest the event after the weekend. While this is still a gamble, I do think the gold bears are in charge below 1830. If you want to take the gamble, then I would say a short has a higher risk:return ratio currently.
Tomorrow we will get the answer. Good luck and may the blue pips be on your side.
Cesaro