News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bullish
Oil - US Crude
Bullish
Wall Street
Mixed
Gold
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Bullish
USD/JPY
Bearish
More View more
Real Time News
  • #Crudeoil prices could reverse lower as the #OPEC Monthly Oil Market Report (MOMR) forecasts fading global demand and oversupply concerns. Get your #commodities update from @DanielGMoss here: https://t.co/G02ajeLPqZ https://t.co/THuauT4XQ9
  • The outlook for the $EURUSD pair has worsened after its failure to move back to the high just above 1.20 touched on September 1 despite the #ECB’s decision earlier this month not to talk down the Euro. Get your #currencies update from @MartinSEssex here: https://t.co/kDCHxHgGlU https://t.co/Li4jHqaNdC
  • #USDollar Outlook Bearish on Mnuchin & Powell Testimonies, Key US Data ⬇️ https://www.dailyfx.com/forex/fundamental/forecast/weekly/usd/2020/09/20/US-Dollar-Outlook-Bearish-on-Mnuchin-Powell-Testimonies-Key-US-Data.html
  • The London trading session accounts for around 35% of total average forex turnover*, the largest amount relative to its peers. The London forex session overlaps with the New York session. Learn about trading the London forex session here: https://t.co/UTWxbnNz7M https://t.co/fuWSUDE1pT
  • The Federal Reserve System (the Fed) was founded in 1913 by the United States Congress. The Fed’s actions and policies have a major impact on currency value, affecting many trades involving the US Dollar. Learn more about the Fed here: https://t.co/ADSC4sIHrP https://t.co/eRTdlhAOFN
  • The Japanese #Yen may continue to exhibit a bullish behavior as the Bank of Japan (BoJ) appears to be in no rush to alter the path for monetary policy. Get your #currencies update from @DavidJSong here: https://t.co/HFjc6KGzRw
  • The New Zealand Dollar appears poised to extend its climb against its haven-associated counterparts as long-term trend break hints at cyclical upturn. Get your $NZDUSD market update from @DanielGMoss here: https://t.co/CPxP1Q8B6d https://t.co/n2wESiqnpJ
  • The US Dollar may rise against ASEAN currencies like the Singapore Dollar if local retail sales and sentiment data disappoints. USD/IDR may fall on the Bank of Indonesia. Get your market update from @ddubrovskyFX here:https://t.co/HpH8pXFdLl https://t.co/laHmaZXpJe
  • The US Dollar may rise against the Singapore Dollar and Philippine Peso. USD/MYR’s downtrend holds, but a bullish pattern brews. USD/IDR seems stuck between key technical levels.Get youe #ASEAN currencies market update from @ddubrovskyFX here:https://t.co/TF6DRVp6kX https://t.co/WEtxkdSwxD
  • There are three major forex trading sessions which comprise the 24-hour market: the London session, the US session and the Asian session. Learn about the characteristics of each session here: https://t.co/UVvf51HiVP https://t.co/4wlRjBTCzK
Gold Hits 5-Month High on Fed Outlook- Pullback to Offer Buy Entry

Gold Hits 5-Month High on Fed Outlook- Pullback to Offer Buy Entry

2012-09-01 01:49:00
Michael Boutros, Strategist
Share:
Gold_Hits_5-Month_High_on_Fed_body_Picture_1.png, Gold Hits 5-Month High on Fed Outlook- Pullback to Offer Buy Entry

Gold Hits 5-Month High on Fed Outlook- Pullback to Offer Buy Entry

Fundamental Forecast for Gold: Bullish

Gold continued its advance this week with the precious metal gaining 1.29% to trade at $1692 at the close of trade in New York on Friday. Bullion was under pressure early in the week as investors scaled back bets ahead of Friday’s highly anticipated speech by Federal Reserve Chairman Ben Bernanke at the annual Economic Policy Symposium at Jackson Hole. His remarks were enough to feed market expectations for further Fed action with the surge in gold on Friday suggesting that market participants have already begun to factor in another round of quantitative easing.

The Jackson Hole summit was the highlight of the week as Bernanke took center stage with his remarks fueling massive swings in broader risk assets as investors weighed the prospects of future monetary policy. Equity markets initially fell on Bernanke’s remarks as he cited that, ‘using non-traditional policy tools is challenging’ and that, ‘these operations could impair functioning of the securities markets.’ However the decline was short-lived as the chairman noted that the Fed would act ‘forceful in supporting a sustainable recovery’ with Bernanke speaking at length in defense of the Fed’s actions to date in response to the crisis. Gold quickly pared earlier losses with the yellow metal surging into the close of trade on Friday to close at 5-month highs.

So what did we learn from Bernanke’s remarks? Although the Fed Chairman held the door open to further expand monetary policy, his remarks struck a slightly different tone from the very dovish FOMC minutes released earlier this month. Indeed, it seems as though QE remains an option for the central bank but it’s likely that the Fed will continue to sit on the sidelines unless the economic docket turns increasingly bleak. We have already heard Fed officials vow to aggressively support the recovery as housing, unemployment, the European crisis and the fiscal cliff continue to pose serious ‘headwinds’ to the economy. However, his defense of quantitative easing and strong references to weakness in the labor markets as a ‘grave concern’ fueled QE speculation with the gold poised for a run at the $1700 figure. It’s important to note that no real commitment has been made today and with thin holiday trade in full effect the advance in bullion may remain limited ahead of the September 13th FOMC interest rate decisions.

From a technical standpoint, gold has now completed a 5-wave advance off the August lows and although our bias remains weighted to the topside, we cannot rule out the possibility for a near-term correction before continuing higher. Gold closed out the week just below the key 61.8% Fibonacci extension taken from the December and May lows at $1692 after breaching above channel resistance dating back to the April lows. A break above this level eyes topside resistance targets at $1715, the March highs at 1726 and the 78.6% extension at $1738. Look for a downside correction to find support at the previous May high at $1671 with only a break below this week’s low at $1646 invalidating our directional bias. Such a scenario exposes subsequent floors at the 38.2% extension at 1630, a level that has served as a clear pivot in price action from the start of the year. Note that RSI closed out the week above the 70-overbought threshold with divergence in price action warning of a possible short-term correction in the days ahead. -MB

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES