Gold jumps after Trump cancels planned Iran attacks and announces a deal. What’s next?
FUNDAMENTAL OVERVIEW
Gold jumped yesterday following Trump’s suspension of planned attacks on Iran and the announcement of an agreement in principle for the MoU to be signed in the next few days. Fed rate hike expectations got pared back immediately with the US dollar and Treasury yields falling quickly.
Looking at all the reports, the prospects of a deal are stronger than ever but there's always some justified scepticism given countless fake Trump's claims we had to endure in the past months. Nevertheless, traders are now unwinding some of the more aggressive bets as optimism replaced fear.
In the short-term, the focus will be on this new development, so we can expect a bigger pullback. Looking ahead, the Fed will be a major catalyst, but the market might forgive some hawkish tone if there’s an actual deal.
If this is real, oil prices will likely continue to fall hard and might reach pre-war levels. The risk then is that negative supply shock turns into a positive demand shock that boosts economic activity further requiring rate hikes anyway, but that will need to be confirmed by the data in the next months.
GOLD TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can see that gold is retesting the broken trendline. We can expect the sellers to step in around these levels with a defined risk above it to keep pushing into the 3,885 level next. The buyers, on the other hand, will want to see the price breaking higher to pile in for a rally into the major downward trendline around the 4,700 level.
GOLD TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we have a minor downward trendline defining the bearish momentum. The sellers continue to lean on the trendline with a defined risk above it to keep pushing into new lows. The buyers, on the other hand, will need the price to break above the trendline to open the door for new highs.
GOLD TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we have a minor upward trendline that could act as support. If the price gets there, we can expect the buyers to lean on it with a defined risk below it to target a break above the downward trendline. The sellers, on the other hand, will look for a break to increase the bearish bets into new lows. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Today, we conclude the week with the University of Michigan consumer sentiment survey.
This article was written by Giuseppe Dellamotta at investinglive.com.提供 MainLink：Investinglive RSS Breaking News Feed
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