The price of Gold crashed after the FOMC as the USD edged higher. The yellow metal registered sharp movements right after the Federal Funds Rate publication. Now, it's trading at 1,622 at the time of writing. Technically, after its massive drop, a temporary rebound could be natural.
XAU/USD crashed after the FED increased the Federal Funds Rate from 3.25% to 4.00% as expected and after confirming further rate hikes. Gold was also under pressure after the ADP Non-Farm Employment Change came in better than expected, at 239K versus 178K expected.
Today, the BOE increased the Official Bank Rate from 2.25% to 3.00% as expected. Still, the price of gold rebounded after the US reported mixed data. The ISM Services PMI came in at 54.4 points versus the 55.5 expected, Unemployment Claims came in at 217K in the last week versus the 220K expected, while Final Services PMI came in at 47.8 points versus 46.6 expected. In addition, Factory Orders and Trade Balance reported worse than expected data.
Tomorrow, the NFP, Unemployment Rate, and Average Hourly Earnings could really shake the markets.
XAU/USD Temporary Rebound In Cards!
XAU/USD reached the 1,617 former low which stands as static support and now it has rebounded. After its massive drop, a temporary rebound was favored. The weekly S1 (1,630) is seen as the first upside obstacle.
Temporary rebounds could bring new selling opportunities. The bias remains bearish as long as it stays under the downtrend line.
XAU/USD Outlook!
A new lower low, a valid breakdown below 1,614 activates a downside continuation and brings new short signals.
