XAUUSD | Strong bearish momentum towards 1980

On Wednesday, the price of gold (XAU/USD) experienced a downward correction in response to statements by Federal Reserve (Fed) Governor Christopher Waller, who cast doubts on a potential interest rate cut in the March meeting. The XAU/USD pair marked its second consecutive decline, indicating further declines in the daily chart. Despite falling below a 20-period Simple Moving Average (SMA), the pair remains above the 100 and 200 SMAs, both in the $1,960 region. In the short term, technical signals show a significant decline without signs of a bearish exhaustion. On the 4-hour chart, XAU/USD is below all moving averages, with the 200 SMA providing resistance around $2,037.25. Technical indicators suggest bearish pressure, supporting the possibility of a downside break below the $2,000 threshold. The price of gold is at its lowest since mid-December, while the U.S. dollar gains ground at the expense of declining global stocks. The XAU/USD pair approaches an intraday low of $2,003.28 as investors reduce bets on a potential Fed rate cut in March. According to the CME FedWatch tool, the probability of a cut is now 52%, down from the approximately 70% recorded a few weeks ago. Mixed U.S. data on Wednesday, with Retail Sales and Industrial Production both increasing in December, along with assertive Fed statements, reduce the likelihood of a rate cut in March. Bond yields are rising, with the 2-year Treasury offering 4.36%, and the 10-year yield at 4.10%, both at new multi-week highs. Meanwhile, Wall Street extends its Tuesday decline.

Comment:

XAUUSD did a significant upward, now the price is near a good zone to look for a short 2022-2026.