Good morning team,
A very volatile night across the market. The FED announced an acceleration of the speed of its bond tapering program, however, they are still increasing the size of its balance sheet just at a slightly slower pace. Whilst the FED is expected to complete their bond tapering plan in early 2022, they have not yet begun discussions about reducing the size of its balance sheet. Based on the reaction of the DXY, the market was possibly expecting an announcement of a reduction of the FED’s balance sheet in the near future as the USD is weakening across the board. Generally speaking, a weaker USD is positive for gold prices. Check the DXY technical analysis for more information.
GOLD – Daily Chart
Gold had a strong bounce in the 1752 support zone which has provided an area to buy the metal from previously. The 1808-1815 resistance zone will be our initial target level.
GOLD – 1 Hour Chart
Trade Setup: BUY market execution, current price 1779, stop loss 1759 and take profit targets 1809-1815.
Stop loss: 200 pips
Take profit: 300-360 pips