0822 GOLD facing a new leg down for correction
Hello traders.
Gold's recent strong rally may be approaching a tipping point, and market participants should be wary of the risk of a possible pullback. Although current market sentiment remains bullish for gold, there are several factors suggesting that this wave of upward momentum may be about to run out:
★ Overly optimistic rate cut expectations:
According to Chi-Mart's FedWatch Tool, traders have fully digested expectations of a Fed rate cut in September, with the likelihood of a 25 basis point cut as high as 70%. This highly optimistic expectation may have been fully reflected in the current gold price, leaving limited room for further gains.
★Technical facing resistance:
The price of gold and then continue to rise continuously for some time, and again is to create a record high. From the perspective of technical analysis, this price level may become a strong psychological resistance, increasing the possibility of a short-term retracement.
★ Market sentiment overheated **:
The current market bullish sentiment towards gold may have reached an extreme.
Key events to watch this week:
One, the minutes of the Federal Reserve's July policy meeting, due later today.
The second is Fed Chairman Powell's speech on the U.S. economic outlook in Jackson Hole on Friday.
Considering that the current market has largely digested expectations of aggressive rate cuts, it will be difficult for Fed Chair Powell to exceed market expectations for a dovish stance. In fact, the market may just have to face a test of some realities that will be enough to trigger a correction in gold prices.
[Gold
On the daily chart, gold's W breakout pattern seems to be a lackluster rise after creating a new all-time high.
And this breakout pattern just took gold up another $48 late, 1.94%, see chart one. That's small CASE for gold with big swings. You can see that the bulls are also hesitating.
There is no reversal on the daily or weekly charts, so in the 4 hour chart we are considering a higher oscillator swing. See chart two. Previous longs consider leaving the market and shorts wait for a new 1-hour short signal in the US market time to do a retracement after the market. The target is shown in chart II.
GOOD LUCK!
LESS IS MORE!
Gold's recent strong rally may be approaching a tipping point, and market participants should be wary of the risk of a possible pullback. Although current market sentiment remains bullish for gold, there are several factors suggesting that this wave of upward momentum may be about to run out:
★ Overly optimistic rate cut expectations:
According to Chi-Mart's FedWatch Tool, traders have fully digested expectations of a Fed rate cut in September, with the likelihood of a 25 basis point cut as high as 70%. This highly optimistic expectation may have been fully reflected in the current gold price, leaving limited room for further gains.
★Technical facing resistance:
The price of gold and then continue to rise continuously for some time, and again is to create a record high. From the perspective of technical analysis, this price level may become a strong psychological resistance, increasing the possibility of a short-term retracement.
★ Market sentiment overheated **:
The current market bullish sentiment towards gold may have reached an extreme.
Key events to watch this week:
One, the minutes of the Federal Reserve's July policy meeting, due later today.
The second is Fed Chairman Powell's speech on the U.S. economic outlook in Jackson Hole on Friday.
Considering that the current market has largely digested expectations of aggressive rate cuts, it will be difficult for Fed Chair Powell to exceed market expectations for a dovish stance. In fact, the market may just have to face a test of some realities that will be enough to trigger a correction in gold prices.
[Gold
On the daily chart, gold's W breakout pattern seems to be a lackluster rise after creating a new all-time high.
And this breakout pattern just took gold up another $48 late, 1.94%, see chart one. That's small CASE for gold with big swings. You can see that the bulls are also hesitating.
There is no reversal on the daily or weekly charts, so in the 4 hour chart we are considering a higher oscillator swing. See chart two. Previous longs consider leaving the market and shorts wait for a new 1-hour short signal in the US market time to do a retracement after the market. The target is shown in chart II.
GOOD LUCK!
LESS IS MORE!
Course and daily analysis sent via email, to sub via web:
signalsofswingtrading.com
Wechat: ziyuvera
Tele: t.me/VeraFuntrader
signalsofswingtrading.com
Wechat: ziyuvera
Tele: t.me/VeraFuntrader
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.