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. See our updated Privacy Policy here.

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
Subscribe
Please try again
EUR/USD
Bearish
Oil - US Crude
Bullish
Wall Street
Bearish
Gold
Bearish
GBP/USD
Bearish
USD/JPY
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
More View more
Real Time News
  • The ISM manufacturing index plays an important role in forex trading, with ISM data influencing currency prices globally. Find out about the recent history of ISM data, how to track it, and how to trade its release here: https://t.co/MZtBh88nOv https://t.co/hQgZB9T73q
  • The continuity seen across these volatility cycles is a good thing. Historical precedence offer a blueprint for identifying conditions supportive for a vol-event to occur, and how they may unfold. Deepen your knowledge of historical volatility here: https://t.co/vg7w10CKUR https://t.co/9JVh6BsWa2
  • There’s a strong correlation between interest rates and forex trading. Forex is ruled by many variables, but the interest rate of the currency is the fundamental factor that prevails above them all. Learn how interest rates impact currency markets here: https://t.co/J0EPMD2Cfi https://t.co/ZDuee58Abe
  • Many people are attracted to forex trading due to the amount of leverage that brokers provide. Leverage allows traders to gain more exposure in financial markets than what they are required to pay for. Learn about FX leverage here: https://t.co/BdgFmkRxVw https://t.co/niJL2W2yXV
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here: https://t.co/Yl9vM7kO6a https://t.co/0rNbbrd58e
  • Traders utilize varying time frames to speculate in the forex market. The two most common are long- and short-term-time frames which transmits through to trend and trigger charts. Learn more about time-frame analysis here: https://t.co/9S5tXIs3SX https://t.co/zPzJAxBJxt
  • Emotions are often a key driving force behind FOMO. If left unchecked, they can lead traders to neglect trading plans and exceed comfortable levels of risk. Read on and get your emotions in check here: https://t.co/eILWbFgHRE https://t.co/uf6KEYTes5
  • 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/reRmDe1Ksp https://t.co/gRjdVfbg66
  • Implementing a trading checklist is a vital part of the trading process because it helps traders to stay disciplined, stick to the trading plan, and builds confidence. Learn how to stick to the plan, stay disciplined, and use a checklist here: https://t.co/SQUCCYRCIk https://t.co/mLLGqYUygY
  • Use this technical analysis pattern recognition skills test to sharpen your knowledge: https://t.co/Qgz89PTxnu https://t.co/HUYJzEkYiT
Gold Prices Pop after Fed, But Remain in Bearish Channel

Gold Prices Pop after Fed, But Remain in Bearish Channel

James Stanley, Senior Strategist

To receive James Stanley’s Analysis directly via email, please sign up here.

Talking Points:

  • Gold Technical Strategy: Longer-term up-trend still alive, near-term bearish channel still active (bull flag formation).
  • Gold prices caught a major bid after yesterday’s FOMC announcement as the US Dollar sold off.
  • If you’re looking for trading ideas, check out our Trading Guides. And if you want something more short-term in nature, check out our SSI indicator.

In our last article, we looked at the bull flag formation that had built in Gold prices over the prior two months; after the aggressive move higher in the first half of the year collected and consolidated in a down-ward sloping trend-channel, producing a bull flag formation. And if we match this up with shifts from the Federal Reserve this year, it makes sense. As the Fed has backed down from near-term rate hikes, happening in February, and March along with an implied shift in June; Gold prices have moved aggressively higher as the US Dollar has weakened. And then as the Fed goes into one of those ‘hawkish commentary’ modes where many Fed officials talk up the prospect of higher rates, and Gold prices move lower as the Dollar strengthens to factor in those higher probabilities of a near-term rate hike.

Yesterday saw a similar such meeting from the Federal Reserve, although the price action emanating from the announcement may not have the staying power that Gold bulls are looking for. The US Dollar tanked around yesterday’s FOMC meeting as the bank adjusted rate expectations for 2017 and thereafter. However, the Fed did remain relatively hawkish for 2016, carrying the expectation that ‘the case for a rate hike has strengthened,’ opening the door for a potential move in December. The really attractive top-side setup in Gold will be when the Fed finally capitulates on this theme, which will likely happen should risk markets wobble as we move towards that December meeting.

The current setup in Gold remains near-term bearish but longer-term bullish, working deeper into the two-month old bull flag formation: And after yesterday’s 2.3% rip off of the lows, chasing Gold prices higher from here could be a daunting prospect, as it seems as though we’re waiting for the next ‘lower-high’ to print within the downward sloping channel.

To set stance moving forward traders can watch for the recent swing levels in order to define stance. The prior swing high from two weeks ago is at $1,352.49; and should price action break above this high we’ll also have a break above the flag/channel formation. This could be assigned bullishly, at which point traders can try to catch a ‘higher low. The 23.6% Fiboancci retracement of the post-Brexit move at $1,345.56 could be an opportune zone to begin watching for this should higher-highs come into the equation.

On the support side of price action, we have a potential higher-low in mid-September, above the prior swing-low set earlier in the month. Should price action revisit this zone around the 50% Fibonacci retracement around $1,312.57, while staying above the $1,306 swing low, a top-side setup could be sought out within the channel formation itself.

Gold Prices Pop after Fed, But Remain in Bearish Channel

Chart prepared by James Stanley

--- Written by James Stanley, Analyst for DailyFX.com

To receive James Stanley’s analysis directly via email, please SIGN UP HERE

Contact and follow James on Twitter: @JStanleyFX

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

DISCLOSURES