GOLD Weekly Outlook: The mix of coronavirus and the Fed.
This is a break down analysis of Gold (XAUUSD) ahead of Wednesday's (January 29th) Fed Interest Rate Decision.
Fundamental Analysis:
- Starting this part of the research we need to make clear that the current price is heavily pushed upwards due to the global worries on the Coronavirus outbreak. Gold has the use of a Safe Haven and when geopolitical tensions rise, investors move capital from riskier assets like stocks (which fall as it has been happening since Friday) to the safety of Gold (which rises). This inflated by fundamental reasons price action is similar to the sessions during the Iran conflict. You can even see that on the support level. If the Coronavirus phase has one more high to give before the tension is de-escalated, nobody knows but technically the resistance is at 1611.
- The Fed interest rate decision is the highlight of the week, an event that no only affects Gold but all markets alike (forex, stocks, bonds etc). The forecast for the Fed Interest Rate Decision is steady at +1.75%. If the actual reading matches this forecast there is a 66.7% chance of a bullish trend in the next 2 days based on the last 12 Fed events.
Technical Analysis:
- The trend on the 1D chart is bullish with all major indicators well in the green zone, RSI at 68.913, STOCH at 53.08, ADX at 46.006, MACD at 17.460. This trend is forming an Ascending Triangle with 1555 as the Support and 1611 as the Resistance.
- The MA50 is supporting this uptrend since January 21.
- The higher low trend line of the Ascending Triangle is the ideal buy zone and we display that in green.
- The RSI pattern hints that we are closer to the top than the bottom of this move.
All the above indicate that Gold, even though the virus worries can lift it towards the Resistance, there are slightly more chances to pull back to the 1D MA50 and the buy zone and as the recent Fed event statistics show, start rising after on a 2 day bullish trend.
If you like this idea give us a like, follow and share your thoughts in the comments section below. Remember to stay tuned for future technical analysis , news, updates, and more from PrimeXBT!
Fundamental Analysis:
- Starting this part of the research we need to make clear that the current price is heavily pushed upwards due to the global worries on the Coronavirus outbreak. Gold has the use of a Safe Haven and when geopolitical tensions rise, investors move capital from riskier assets like stocks (which fall as it has been happening since Friday) to the safety of Gold (which rises). This inflated by fundamental reasons price action is similar to the sessions during the Iran conflict. You can even see that on the support level. If the Coronavirus phase has one more high to give before the tension is de-escalated, nobody knows but technically the resistance is at 1611.
- The Fed interest rate decision is the highlight of the week, an event that no only affects Gold but all markets alike (forex, stocks, bonds etc). The forecast for the Fed Interest Rate Decision is steady at +1.75%. If the actual reading matches this forecast there is a 66.7% chance of a bullish trend in the next 2 days based on the last 12 Fed events.
Technical Analysis:
- The trend on the 1D chart is bullish with all major indicators well in the green zone, RSI at 68.913, STOCH at 53.08, ADX at 46.006, MACD at 17.460. This trend is forming an Ascending Triangle with 1555 as the Support and 1611 as the Resistance.
- The MA50 is supporting this uptrend since January 21.
- The higher low trend line of the Ascending Triangle is the ideal buy zone and we display that in green.
- The RSI pattern hints that we are closer to the top than the bottom of this move.
All the above indicate that Gold, even though the virus worries can lift it towards the Resistance, there are slightly more chances to pull back to the 1D MA50 and the buy zone and as the recent Fed event statistics show, start rising after on a 2 day bullish trend.
If you like this idea give us a like, follow and share your thoughts in the comments section below. Remember to stay tuned for future technical analysis , news, updates, and more from PrimeXBT!