Gold prices saw a 0.30% increase on Tuesday due to a combination of factors such as the drop in US Treasury yields and the weakening of the US dollar. Traders have their eyes on upcoming US inflation data and the first presidential debate between Kamala Harris and Donald Trump as potential catalysts that could impact the market sentiment. Currently, Gold (XAUUSD) is trading at $2,514, showing signs of recovery from a recent low of $2,500.
The market is currently speculating on the possibility of a Federal Reserve interest rate cut, with a 67% probability of a 25 basis point reduction and a 33% chance of a 50 basis point cut. Recent US job data revealed lower than expected new job numbers, although the unemployment rate saw a slight decrease, providing some relief to the Federal Reserve.
Examining the H4 timeframe for XAUUSD, the recent bounce from trendline support was influenced by the convergence of the daily timeframe pivot and hidden divergence on the stochastic indicator. However, the current price action is now hovering around another daily timeframe pivot, raising the likelihood of an impending reversal. This situation presents an opportunity for bears to enter the market, with a secondary entry option being a break-and-retest of the trendline support.
On the H1 timeframe, the price appears to be forming an SBR pattern, which could be confirmed following a rejection from the supply zone above inducement. Overall, the sentiment remains bearish based on the current analysis.
Analysts are leaning towards a bearish direction, setting a target price of $2,495.75 with an invalidation level at $2,530.15. The market continues to react to various factors and events, with traders closely monitoring the situation for potential trading opportunities.
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