Ahead of major economic events, gold prices are range bound and continued to consolidate in a narrow trading range of $1,362- 1,340. Anyways, the trading range is very likely to get violated during the U.S. session on the release of FOMC meeting minutes. Here’s what to expect…
FOMC Meeting Minutes
In the prevailing FOMC, the Fed is anticipated to hold the Fed funds rate unchanged at the target range of 2.25-2.50%. Investors are convinced that rate cuts in June are not coming; however, the July’s meeting can be of high importance. Traders are more interested in forward guidance.
So what happens if FOMC fails to communicate about July rate hike? As of now, most of the traders have priced in dovish policy, and no discussion on the July’s rate hike will trigger a sharp reversal in the market. Gold can plunge dramatically due to the strength in the greenback. Brace yourself…
Gold’s Technical Analysis
On the 2- hour chart, gold has tested $1,350 number of times, making this level a triple top pattern. This pattern is known for a bearish reversal. But at this point, I can’t say much about it as the FOMC meeting minutes is an actual trendsetter today.
Gold is holding below a substantial resistance level of $1,350 and has formed a bearish butterfly pattern on the daily timeframe. The pattern suggests a strong chance of a bearish trend until $1,337 and $1,326. On the other hand, the violation of $1,350 can bring more buyers to the bullion market until $1,360 and $1371.
Key Trading Level: 1340.03
Gold – Trade Tips
Consider staying bearish under $1,350 and bullish above this level.
EUR/USD – ECB Draghi Dents Euro’s Demand
European Central Bank’s Presiden Mario Draghi shook the market with an additional policy easing sentiment. European Central Bank (ECB) President Mario Draghi attempted to convince market players about the bank’s capacity to perform amid growing uncertainties on the real influence of monetary policy if a fresh recession were to develop.
On the technical side, the EUR/USD is taking a breather ahead of the FOMC meeting later today. The pair is seeking to support at around 1.1200. In the 4 hours graph, the EUR/USD is trading between the 61.8% and the 50% retracements of its latest daily advance, with the most relevant being at 1.1200, providing strong static support.
Key Trading Level: 1.1252
All the best!