Gold Price Analysis: XAUUSD bulls break a critical trendline as US Dollar bears move in – by fx_ross Gold Commodities DollarIndex Politics CPI
In his presser, Jerome Powell argued that we could see a higher terminal rate vs the prior market expectations. However, in the recent Nonfarm Payrolls report, the Unemployment Rate was a disappointment. This, combined with recent dovish rhetoric from some Fed speakers following prior disappointments on other important data, such as Manufacturing and Services, investors have begun to flip the switch on their outlook for the Fed and expect a slower pace of tightening is on the cards.
'A below consensus print is likely to help push the pricing for the terminal funds rate modestly lower, likely bull steepening the curve in the process,'' analysts at TD Securities argued. ''The risk of a lower reading is why we took profit on our 2s10s curve steepener last week and went long 10y Treasuries, which we viewed as attractive,'' they said.
That W-formation looks menacing for the week ahead with prospects of a push into the trendline and when coupled with the following Crab harmonic pattern on the daily chart:With a high of $1,716, there is still some way to go until the $1,730 rounded number and October highs. Indeed, there are still a number of sessions to go until the US CPI event as well and a day is also a long time in US politics.
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