- XAU/USD should register sharp movements after the FOMC Meeting Minutes.
- A new lower low validates more declines.
- Only escaping from this range could bring us new opportunities.
The gold price rallied on Wednesday, jumping to daily highs of $1,980. XAU/USD soared as the Eurozone, German, UK, and US services sectors remained in the contraction territory.
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Also, the USD’s corrective downside versus its rivals allowed the yellow metal to turn to the upside. Today, the Reserve Bank of New Zealand increased the Official Cash Rate from 5.25% to 5.50%, matching expectations. The New Zealand dollar crashed after the data release, so the XAU/USD could also slip lower.
Earlier, the United Kingdom inflation figures brought more action. The Consumer Price Index reported an 8.7% growth versus the 8.2% growth estimated, while Core CPI increased by 6.8%, beating the 6.2% growth forecasted.
Higher inflation could force the BOE to take action again. This scenario could punish the price of gold. Later, the BOE Gov Bailey Speaks could bring life to the XAU/USD.
Still, the most important event is represented by the FOMC Meeting Minutes. Gold should register sharp movements in both directions around this report. Tomorrow, the Prelim GDP and Unemployment Claims represent high-impact events.
Gold price technical analysis: Ranging around resistance
Technically, the XAU/USD rallied after retesting the median line (ML). It almost hit the $1,984 former high and the weekly pivot point.
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In the short term, it could continue to move sideways. Escaping from the range between $1,984 and $1,952 levels could bring us new trading opportunities.
The range pattern represents a downside continuation pattern. Still, only a new lower low can activate more declines. Taking out the median line (ML) opens the door for a bearish continuation towards the lower median line (LML). On the other hand, a valid breakout through $1,984 may confirm a further rise.
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