Fib level 2.618%, GOLD is under pressure before the FOMC meeting
Gold OANDA:XAUUSD
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XAUUSD
spot faced strong selling pressure and fell to a one-week low ahead of the Federal Reserve meeting.
The Conference Board's consumer confidence index fell for the third straight month in April, falling to 97.0 from a downwardly revised 103.1 in March.
Pessimism prevails ahead of the Federal Reserve's monetary policy announcement scheduled for Wednesday. The central bank is expected to leave interest rates unchanged amid lingering signs of inflationary pressures. The central bank is expected to keep interest rates higher for longer and send a hawkish message.
Gold investors' attention turns to FOMC and Nonfarm Payrolls
The Federal Reserve will announce its monetary policy decision on Wednesday. Markets expect the Federal Reserve to keep policy rates unchanged at 5.25%-5.5%.
According to the CME FedWatch tool, there is about a 91.6% chance that the Fed will choose to leave policy unchanged again in June.
On Friday, the US Bureau of Labor Statistics will release the April jobs report. A sharp decline in nonfarm payrolls (NFP) growth could cause an immediate dollar sell-off .
Even if the data doesn't have a very profound impact on expectations for a rate cut in June, it could still weigh on the dollar if investors favor a policy change in September.
The CME FedWatch tool shows that markets are pricing in a 53.3% chance that the Fed's policy rate will be unchanged in September. On the other hand, nonfarm payrolls data is stronger than expected, especially if it goes coupled with higher wage inflation data, could increase expectations that the Fed will take no action in September and cause gold prices to fall sharply this weekend.
Analysis of technical prospects for
XAUUSD
Gold fell sharply in yesterday's trading session after breaking the $2,322 level and now this technical level becomes the closest current resistance.
Along with that, gold is also stopping its decline when approaching the 2.618% Fibonacci extension level, and this is also the current closest support level.
If gold continues to sell off breaking below the 2.618% Fibonacci extension it will likely experience further selling pressure with no chance of a recovery towards the upper channel edge and beyond the 3.618 Fibonacci level. %. Therefore, for protection levels open long positions should be installed behind the 2.618% Fibonacci extension level.
On the other hand, the fact that gold still holds above the Fibonacci retracement level still "raises hope" for those who opened long positions to see a recovery to retest the level of 2,322 USD. However, currently, in the short term, gold does not have enough conditions to increase in price as price activity is in a short-term downtrend from the price channel and price activity is below EMA21.
During the day, the technical outlook of gold price is noticed by the following technical levels.
Support: 2,284USD
Resistance: 2,300 – 2,322USD
?SELL XAUUSD | 2326 - 2324
⚰️SL: 2330
⬆️TP1: 2319
⬆️TP2: 2314
?BUY XAUUSD | 2259 - 2261
⚰️SL: 2255
⬆️TP1: 2266
⬆️TP2: 2271
