- The ECB and BOE represent high-impact events.
- The bias remains bullish despite temporary retreats.
- The fundamentals should move the markets today.
The gold price extended its rally, marking fresh multi-month highs above $1,950. The yellow metal turned upside after the US CB Consumer Confidence, and Chicago PMI ended worse than expected on Tuesday.
–Are you interested in learning more about forex robots? Check our detailed guide-
Yesterday, the USD took a hit from the US economic figures. The ISM Manufacturing PMI came in at 47.4 points below 48.0 points expected, confirming further contraction, while ADP Non-Farm Employment Change was reported lower at 106K below 176K estimates.
Also, the Federal Reserve increased the Federal Funds Rate by 25 bps as expected and announced further hikes in the upcoming meetings. Today, the Bank of England should deliver a 50-bps hike. The Official Bank Rate is expected at 4.00% as the MPC members should deliver a 7 to 2 vote.
Furthermore, the European Central Bank should also increase the Main Refinancing Rate by 50 bps, from 2.50% to 3.00%. The ECB Press Conference should shake the markets later. Also, the US is to release the Unemployment Claims and Factory Orders. The economic data could have an impact as well.
Tomorrow, the Non-Farm Employment Change, Unemployment Rate, ISM Services PMI, and Average Hourly Earnings could change the sentiment if the data comes in better than expected.
Gold price technical analysis: Strong rally above $1,950
Technically, the XAU/USD reached the $1,957 historical level, a static resistance. The $1,949 former high turned into static support. The weekly R1 ($1,947) represents a downside obstacle as well. The rate ignored the upper median line (UML), so the yellow metal could approach the upper median line (UML) as long as it stayed above it.
–Are you interested in learning more about South African forex brokers? Check our detailed guide-
Still, after this strong rally, we cannot exclude a temporary drop. The price could come back to test and retest the near-term support levels before jumping higher. A small retreat or a consolidation could bring new longs could announce a new bullish momentum.
Looking to trade forex now? Invest at eToro!
68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money