Even though FOMC’s non-action pushed all risk correlated assets higher, not all asset reacted equally. For example, it is clear that US stocks are not the biggest beneficiaries from yesterday, while Crude Oil is more slightly more bullish. Price action for Gold was not as bullish as Crude, with bulls not able to climb higher than the initial post FOMC jump until now, but nonetheless absolute percentage returns in Gold was one of the highest yesterday, losing out only to Silver amongst all conventional tradable assets. Hence if were to make a verdict, we would say that Gold benefited far greater than most if not all assets, which implies that the inherent sentiment in Gold may be slightly more bullish than the rest of the aforementioned assets.
2 Hourly Chart
Under this context, the break of 1,368 resistance right now stands a good chance to test 1,400 resistance even though Stochastic readings are currently pointing lower after hitting the highest Overbought levels since 9th July. It is possible that price may still yet pullback, but if price stays above 1,357 and is affirmed by Stoch curve staying above 80.0, we could potentially see a trough without the Overbought region – adding to the possibility of a bullish push towards 1,400 with 1,387 providing some slight resistance.
Things are not so bright on the weekly chart though. Prices remain below the descending channel, and current bullish run may only end up giving bears better prices to sell-into especially given that institutions have been spotted clearing their previous long positions at slightly higher prices. Should a bearish rejection be confirmed, it is likely that bearish pressure may increases, potentially even stronger than the week prior. It is also worth noting that the rally yesterday did little to reverse the Stochastic readings which continue to remain below the 80.0 level with Stoch curve continuing to point sharply lower. Hence, the bearish cycle continue to remain in play, and suggest that resistances may hold out better than support lines moving forward even though Gold prices is actually considered bullish in the short-run right now.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.