Critical session for Gold regarding Short-term

My update following this week's U.S. data: I am far from impressed especially by the much better than expected U.S. services PMI and hawkish remarks from the Fed. The market hasn't priced such impressive forecast beating and that is the reason which keeps Gold within the #1,767.80 - #1,778.80 zone. The DX was logically soaring after such data (also GDP flat) and Buyers should put a very good defense head on as U.S. session opening Bell is approaching, as Hourly 4 chart’s trendline was invalidated and in the same manner, Gold is holding some Neutral bias regarding Short-term. Daily chart remains on healthy Bullish Technicals and seen Trading near the most optimal Buying levels. If the Hourly 4 chart’s Support gets invalidated at #1,762.80, then Technically the Short-term momentum on Gold becomes Bearish, and for such fractal to be realized, chances are really slim.


Fundamental analysis: Below the Support, Price-action will be testing the #1,748.80 - #1,752.80 Support zone. It is important to note that Monday’s session Bullish developments on DX had strong after-effect on Gold’s Price-action, however yesterday’s Bearish candle sequence was ignored by Gold to a great extent. That movement was performed due to the worldwide Bond market plunge and the escalation of the Trade tension. That will lead to a capital inflow to Gold, working again as a Low-risk asset for Investors who wish to see the later Trade implications from a safe place. I do not expect this Neutral phenomenon to last for long and Gold has to close the Gap with DX (remember a similar situation on the #1.326.80 - #1.327.80 cycle), which broke the #95.00 barrier on DX the first time since November #12, #2017.


Technical analysis: Big portion of Buyers are wiped out from the market as Gold aggressively broke Support of #1,778.80 and extended the Selling sequence towards #1,762.80 Support fractal (#1,765.80 session Low’s to be more accurate) due to the Bullish Intra-day reversal on DX and Rate hike (both U.S. announcements meeting the forecasts), whose charts are an exact (negative) match. This suggests that DX (# +0.21%) tested its Daily chart’s Resistance zone (next possible rejection will form Quadruple Top’s formation) however if DX extends the relief rally, Bullish Technicals will be invalidated and Price-action may make a contact with #1,748.80 - #1,752.80 Support zone fractal. Keep in mind that Technically, Gold should extend the parabolic uptrend towards #1,800.80 psychological benchmark, however Fundamental diagonal correlation prevailed and engaged the Intra-day (now #2-consecutive session) downwards trend by invalidating Hourly 4 chart’s trendline (it is a reversal pattern most of the times). There are still probabilities for Bullish reversal since Gap fill on DX will be filled sooner or later. If DX extends the relief rally, Gold will always pressure for a Support test, attracting both Short and Medium-term Sellers on the aftermath. As I previously mentioned throughout my remarks, what was causing recent (# +6.00%) parabolic uptrend on Gold was a combination of Trade optimism (Bond Yields losing strongly against the Gold as safe-haven asset in High demand) but mostly in my opinion - DX. It is no surprise that current decline on Gold comes with DX declining sharply after the announcements beating their forecasts. Gold is still struggling to pick a side, and once it does, I will foresee it and utilize it to it’s maximum as all all orders will be overshadowed when trend appears. There is no underlying Buying or Selling trend and as an result, you see and witness violent Intra-day Volatility on Gold.