Gold Price Forecast: XAU/USD bulls look to $1,780 from daily support area – by fx_ross Gold Commodities DollarIndex Fed
While there was a technical bias to the downside for the start of the week, the fundamentals drove the move as investors fretted that better-than-expected service-sector activity could point to the Federal Reserve hiking interest rates for longer.The Institute for Supply Management said its Non-Manufacturing PMI rose to 56.5 last month from 54.
However, the Fed is now seen raising its policy rate, currently in the 3.75%-4% range, to 4.92% by March of next year and more likely than not into the 5%-5.25% range by May, based on futures contract prices and the CME Fed watch tool. However, futures contracts tied to thepolicy rate still imply an 89% chance that the US central bank will increase interest rates by 50 basis points next week to 4.25%-4.50%, with the rates peaking at 4.984% in May 2023.
With the price potentially basing, for the meantime, in the $1,790s, a move into test into the $1,800s was expected to ''draw in the sellers again for the opening sessions with a move into the dynamic support that meets the daily 38.2% Fibonacci and a 50% mean reversion below that.''While the price is now on the backside of the micro trend, testing the daily W-formations's neckline support, a bullish correction could be on the cards with $1,780 eyed.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
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