XAUUSD | Price Action | New perspective | follow-up detailsA panel discussion took place in Sinatra on Wednesday, hosted by the European Central Bank and attended by the heads of the Federal Reserve, Bank of England, and Bank of Japan. The discussion revealed that nearly all participants agreed on the need for higher interest rates to curb higher-than-expected inflation.
Following the panel discussion, Fed Chair Powell addressed a banking event in Madrid on Thursday, where he mentioned that the U.S. central bank was actively seeking the appropriate level of rates to control economic activity and inflation without causing unnecessary weakness.
The Fed has been closely monitoring various aspects of the economy, including the labor market and energy-induced inflation, among others, in preparation for its July 26 meeting to decide on interest rates.
Two important data points in the U.S. are influencing the Fed's decision-making process: First quarter GDP and the Personal Consumption Expenditures Index. These indicators will play a role in determining whether the central bank will proceed with rate hikes over the next few weeks or maintain the current pause in monetary tightening, which was decided on June 14.
According to the Commerce Department, U.S. GDP grew by an annualized rate of 2% in the first quarter of this year. This revelation is likely to provide some relief to the Fed, indicating that its previous rate hikes did not overly impede economic growth. However, inflation remains a concern, with the overall trend showing a slowdown but still at relatively high levels.
Based on these factors, expectations are that the Fed will raise lending rates by another quarter percentage point on July 26, bringing them to a peak of 5.25%.
In the gold market, prices experienced a gain of approximately 5% in both futures trading and the spot price of bullion during the first half of the year. However, concerns over additional rate hikes by the Federal Reserve have caused some uncertainty, leading to a weakening of gold's support at the $1,900 level as price action remains within correction territory. Weekly price action suggests a correction may be underway or has culminated, as seen on the daily time frame in the video, with prices reaching $1,893 during the week despite a rebound on Friday to bring it back to $1,900.
In the video, a comprehensive price action-based technical analysis of the XAUUSD market was conducted. The analysis considered both bullish and bearish sentiments, as well as accumulation and distribution patterns. Valuable insights into potential buyer and seller behavior were gained by examining past price patterns, market behavior, recurring trends, and significant support and resistance levels.
Given the information gathered from this technical perspective, particular emphasis was placed on the key level at $1,900, which will play a crucial role in determining the direction of price action in the upcoming week. The reactions observed within this zone on Monday will provide valuable indicators, especially during the first half of the week. Prepare yourself to capitalize on the opportunities that lie ahead! Stay tuned for updates that will assist in making informed trading decisions throughout the week.
Disclaimer Notice:
Please be aware that margin trading in the foreign exchange market, including commodity trading, CFDs, stocks, and other instruments, carries a high level of risk and may not be suitable for all investors. The content of this speculative material, including all data, is provided by me for educational purposes only and to assist in making independent investment decisions. All information presented here is for reference purposes only, and I do not assume any responsibility for its accuracy.
It is important that you carefully evaluate your investment experience, financial situation, investment objectives, and risk tolerance level. Before making any investment, it is advisable to consult with your independent financial advisor to assess the suitability of your circumstances.
Please note that I cannot guarantee the accuracy of the information provided, and I am not liable for any loss or damage that may directly or indirectly result from the content or the receipt of any instructions or notifications associated with it.
Remember that past performance is not necessarily indicative of future results. Keep this in mind while considering any investment opportunities.
