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XAU/USD: Market expectations

7 December 2018, 12:30

TifiaFX

Against the background of monetary tightening by the Fed since April, gold prices have been in a steady downward trend. In mid-August, the XAU / USD pair reached an annual minimum near the mark of 1160.00, however, then an upward correction began, raising the price of gold to the mark of 1244.00 dollars per troy ounce. Nevertheless, the overall gold trend remains bearish, and the upward correction may end near the reached resistance levels of 1242.00 (ЕМА200 on the daily chart), 1248.00 (Fibonacci level 50% of the correction to the decline wave from July 2016), if the Fed will give clear signals to further tighten its monetary policy.

The breakdown of the support level of 1233.00 (EMA144 on the daily chart) will be the beginning of the return of XAU / USD to the bearish trend.

The soft rhetoric of statements by Fed officials could provoke a breakdown of the achieved resistance levels and a further growth of the XAU / USD towards resistance levels of 1260.00 (ЕМА200 on the weekly chart and the upper limit of the upward channel on the daily chart), 1277.00 (Fibonacci level 61.8%).

We remind you that the publication of key data for the Fed from the US labor market is scheduled for 13:30 (GMT). Predicting the market response to the publication of indicators is often difficult. In any case, when these indicators are published, a surge in volatility is expected in trading not only for USD, but also for the entire financial market. Probably the most cautious investors would prefer to stay out of the market during this time period.

Support Levels: 1233.00, 1220.00, 1212.00, 1204.00, 1198.00, 1185.00, 1160.00

Resistance Levels: 1242.00, 1248.00, 1260.00, 1277.00

*)An advanced fundamental analysis is available on the Tifia Forex Broker website at tifia.com/analytics