Gold Daily Analysis – July 10, 2017
Gold and the dollar characteristically move in opposite directions, which mean if the dollar goes down, gold futures, which are denominated in the U.S. currency, will rise.
The rapid rate of jobs growth reassured investors that the economy is strong enough to justify the Federal Reserve’s plans to raise interest rates one more time this year.
During the June meeting, the FED hiked rates and wedged to its forecast for one more rate hike this year, but the unresponsive price increases outlook has raised doubts over whether officials will be able to stick to their planned reduction path.
As per our technical view, the previous bearish flag chart pattern tested lower target during the last trading session. The selling pressure is a result of panic which was created among traders as more fear was involved.
If selling pressure continues throughout this day, then undoubtedly the price will drop to the next support between $1195- $1184 -$1150 levels.
Meanwhile if there is a little bounce back to reach the previous bearish flag support line at $1217, we can treat this as a selling opportunity in this place.
Note the slope support on the dotted line displayed area at $1184 in the upcoming trading session. I could suggest selling as the best trading strategy as it is expected to travel downward.
The gold trend usually turns at or ahead of the FOMC meeting on every such occasion. We should be monitoring the next FOMC meeting which is due on the 26th of July.