Gold Prices Vulnerable to FOMC- Levels to Know
- Gold prices reverse off long-term slope resistance ahead of Fed
- Updated targets & invalidation levels
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Technical Outlook: Gold has made an initial response to slope resistance extending off the May high & leaves prices vulnerable to further losses while below today’s high. Keep in mind we posted an outside weekly reversal off resistance on building bearish divergence last week and has me looking for a new low in price before resuming higher.
Notes: A newly identified near-term slope extending off the highs further highlights resistance at today’s high at 1212 (keep in mind the monthly open now comes in at 1210) with prices turning just pips from the 50% retracement at 1198. Heading into the FOMC rate decision I would be looking to fade strength while within this formation targeting 1193, 1187 & 1182. Note that a stretch into 1177 & 1171 would represent areas of interest for exhaustion / long-entries with a breach / close above 1219 needed to mark resumption of the broader uptrend.
- A summary of the DailyFX Speculative Sentiment Index (SSI) shows traders are long Gold- the ratio stands at +1.75 (64% of traders are long)- weak bearish reading
- Long positions are 7.1% higher than yesterday but 3.8% below levels seen last week
- Short positions are 6.6% lower than yesterday but 8.1% above levels seen last week
- Open interest is 1.6% higher than yesterday but 8.3% below its monthly average
- Although the current dynamic gives a mixed signal, the recent increase in long positions on building open interest highlights the risk for further weakness near-term.
Relevant Data Releases
Looking for trade ideas? Review DailyFX’s 2017 1Q Projections
Other Setups in Play:
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- Gold Prices Back Below 1200- Here’s the Game Plan
- EUR/USD Eyes 1.0580 Support Ahead of 4Q GDP
---Written by Michael Boutros, Currency Strategist with DailyFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.