Technically the daily chart still shows a bearish structure below the descending trendline. Gold has already rejected the 4690-4700 region and moved lower toward the current 4295 area. 4420-4450 is an important resistance zone while the price around 4497-4523 provide the next major resistance supply area. As long as Gold remains below this resistance structure rallies can continue to attract sellers.
On the downside 4252 is the first important support, a sustained break below it would increase the probability of a move toward 4200 followed by the major demand zone around 4084-3980. The ascending trendline is also approaching this lower support area making 4084-3980 an important decision zone for the larger bullish structure.
Gold remains under pressure as the market prepares for the September FOMC decision tomorrow September16. The Federal Reserve is coming into this meeting with inflation still uncomfortable while recent US data has increased expectations for tighter policy. August CPI showed renewed price pressure and the latest market pricing-economist surveys have moved strongly toward a 25 basis point hike to 3.75%-4.00% compared with the current 3.50%-3.75% range.
The main risk for Gold is therefore not only the rate decision itself but also Fed Chair Kevin Warsh's statement, the updated projections, dot plot and guidance for future hikes. A hawkish Fed stronger USD and higher Treasury yields could put additional pressure on non-yielding Gold. The 10-year Treasury yield has recently approached 5% with inflation and oil-price concerns contributing to the rise in yields.
On the other hand if the Fed delivers the expected hike but signals that further tightening will be limited Gold could see a sharp relief rally as traders sell the USD and yields. Therefore FOMC volatility can be very high in both directions and the initial spike should not automatically be treated as the final trend.
Overall my bias remains bearish below 4420-4450 especially with the hawkish Fed expectations, rising yields and stronger USD creating a fundamental headwind for Gold. However because FOMC is tomorrow I would expect significant volatility around the announcement and would prefer confirmation through an H1-H4 rejection and engulfing candle rather than selling blindly into the event.
Trade Plan - Sell Setup
Sell Zone: 4407-4523
Sell Trigger: H1-H4 bearish rejection or bearish engulfing
Targets: 4342, 4252, 4200, 4084, 3980
Extended Target: 3950-3900
Invalidation: H4 close above 4523. A sustained breakout above this level would weaken the bearish setup and could open the door toward 4600-4690.
Trade Plan - Buy Setup
Buy Zone: 4084-3980
Buy Trigger: H1-H4 bullish rejection or bullish engulfing
Targets: 4200, 4252, 4342, 4407, 4420
Extended Target: 4450-4523
Invalidation: H4 close below 3980. A sustained break below this level would weaken the bullish recovery and could expose 3900-3800.
FOMC Possible Scenario: A hawkish decision or guidance could push Gold below 4252, 4200, 4084, while a dovish surprise or less hawkish guidance could trigger a recovery toward 4407, 4450, 4497-4523.
Note
Please risk management in trading is a Key so use your money accordingly. If you like the idea then please like and boost. Thank you and Good Luck!
On the downside 4252 is the first important support, a sustained break below it would increase the probability of a move toward 4200 followed by the major demand zone around 4084-3980. The ascending trendline is also approaching this lower support area making 4084-3980 an important decision zone for the larger bullish structure.
Gold remains under pressure as the market prepares for the September FOMC decision tomorrow September16. The Federal Reserve is coming into this meeting with inflation still uncomfortable while recent US data has increased expectations for tighter policy. August CPI showed renewed price pressure and the latest market pricing-economist surveys have moved strongly toward a 25 basis point hike to 3.75%-4.00% compared with the current 3.50%-3.75% range.
The main risk for Gold is therefore not only the rate decision itself but also Fed Chair Kevin Warsh's statement, the updated projections, dot plot and guidance for future hikes. A hawkish Fed stronger USD and higher Treasury yields could put additional pressure on non-yielding Gold. The 10-year Treasury yield has recently approached 5% with inflation and oil-price concerns contributing to the rise in yields.
On the other hand if the Fed delivers the expected hike but signals that further tightening will be limited Gold could see a sharp relief rally as traders sell the USD and yields. Therefore FOMC volatility can be very high in both directions and the initial spike should not automatically be treated as the final trend.
Overall my bias remains bearish below 4420-4450 especially with the hawkish Fed expectations, rising yields and stronger USD creating a fundamental headwind for Gold. However because FOMC is tomorrow I would expect significant volatility around the announcement and would prefer confirmation through an H1-H4 rejection and engulfing candle rather than selling blindly into the event.
Trade Plan - Sell Setup
Sell Zone: 4407-4523
Sell Trigger: H1-H4 bearish rejection or bearish engulfing
Targets: 4342, 4252, 4200, 4084, 3980
Extended Target: 3950-3900
Invalidation: H4 close above 4523. A sustained breakout above this level would weaken the bearish setup and could open the door toward 4600-4690.
Trade Plan - Buy Setup
Buy Zone: 4084-3980
Buy Trigger: H1-H4 bullish rejection or bullish engulfing
Targets: 4200, 4252, 4342, 4407, 4420
Extended Target: 4450-4523
Invalidation: H4 close below 3980. A sustained break below this level would weaken the bullish recovery and could expose 3900-3800.
FOMC Possible Scenario: A hawkish decision or guidance could push Gold below 4252, 4200, 4084, while a dovish surprise or less hawkish guidance could trigger a recovery toward 4407, 4450, 4497-4523.
Note
Please risk management in trading is a Key so use your money accordingly. If you like the idea then please like and boost. Thank you and Good Luck!
Trade active
Gold remains in a bearish structure below the descending trendline and the 4391-4445 resistance area. The sell trade remains active with price currently around 4330 after bouncing from the 4253-4271 support zone.
For today the main focus is the Fed rate decision and markets are pricing in roughly a 93% chance of a 25bp hike so the statement, projections, dot plot and press conference could create strong volatility.
Technically rejection from 4391-4445 can keep the downside pressure active toward 4280, 4241 and potentially 4108. A strong 4H close above 4445 would weaken the bearish setup and expose 4488 next.
Key Levels to Watch:
Resistance: 4391, 4407, 4426-4445
Support: 4339, 4280, 4241
Trade closed: target reached
Target achieved successfully$260=2600 Pips Booked ($4390-$4130 Target)
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.