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Are Gold Prices Carving Out a Major Bottom Before FOMC?

Are Gold Prices Carving Out a Major Bottom Before FOMC?

Ilya Spivak, Head Strategist, APAC

Talking Points:

  • US Dollar Rally Takes a Breather at Chart Resistance
  • S&P 500 Corrects Higher, Overall Setup Favors Losses
  • Gold Prices May Be Positioning for a Major Reversal

Can’t access to the Dow Jones FXCM US Dollar Index? Try the USD basket on Mirror Trader. **

US DOLLAR TECHNICAL ANALYSIS – Prices rose as expected after putting in a bullish Piercing Line candlestick pattern. A break above resistance in the 10669-85 area, marked by the December 4 high and the 38.2% Fibonacci expansion, opens the door for a challenge of the 50% level at 10723. Near-term support is at 10612, a former range bottom, followed by 10565 (the December 10 low).

Forex_Are_Gold_Prices_Carving_Out_a_Major_Bottom_Before_FOMC_body_Picture_5.png, Are Gold Prices Carving Out a Major Bottom Before FOMC?

Daily Chart - Created Using FXCM Marketscope 2.0

** The Dow Jones FXCM US Dollar Index and the Mirror Trader USD basket are not the same product.

S&P 500 TECHNICAL ANALYSIS – Prices fell as expected, with a break below resistance-turned-support at 1778.90 (October 30 swing high) exposing the 38.2% Fibonacci retracement at 1749.60. A further push below that targets the 50% level at 1730.00. Alternatively, turning back above 1778.90 targets the 1813.10 (November 29 high).

Forex_Are_Gold_Prices_Carving_Out_a_Major_Bottom_Before_FOMC_body_Picture_6.png, Are Gold Prices Carving Out a Major Bottom Before FOMC?

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD TECHNICAL ANALYSIS Prices may be carving out a bullish Head and Shoulders bottom chart formation. Confirmation requires a close above resistance in the 1260.84-68.84 area, marked by the October 11 low and the 38.2% Fib retracement. A break higher initially exposes the 1286.57, the 50% level. Near-term support is at 1211.44, the December 6 low.

Forex_Are_Gold_Prices_Carving_Out_a_Major_Bottom_Before_FOMC_body_Picture_7.png, Are Gold Prices Carving Out a Major Bottom Before FOMC?

Daily Chart - Created Using FXCM Marketscope 2.0

CRUDE OIL TECHNICAL ANALYSIS Prices declined as expected after putting in a bearish Dark Cloud Cover candlestick pattern, breaking the 14.6% Fibonacci expansion at 96.89. Sellers now aim to challenge the 95.36-75 area, marked by the 23.6% level and the November 6 high. A further push below that eyes 93.91, the 38.2% Fib. A reversal back above 96.89 targets 98.74 (October 28 high).

Forex_Are_Gold_Prices_Carving_Out_a_Major_Bottom_Before_FOMC_body_Picture_8.png, Are Gold Prices Carving Out a Major Bottom Before FOMC?

Daily Chart - Created Using FXCM Marketscope 2.0

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

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

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