Dovish FOMC Put Gold On Fire – How To Trade Today?
Arslan Butt • 2 min read
Good Morning, traders. The previous metal good is keeping the bullish momentum after the release of FOMC meeting minutes. However, most of the moment was already forecasted in our previous update Two Things To Know To Trade Gold Today. Here's another hot setup on Gold to trade today.
FOMC – Meeting Minutes Explained
My colleague Shain covered the FOMC meeting minutes in details. Do check the update on FOMC meeting minutes here. The Fed’s meeting minutes from the September meeting came out insignificantly more dovish than anticipated. Nonetheless, the FOMC persists on the path to hike rates in December.
You must be thinking if Fed (Federal Reserve) talked about another rate hike this year in 2017, then why USD slipped? Well, it's linked with the sentiment analysis side. Since we all are expecting a third rate hike in December and this is already "priced in." Having said this, what's so exciting about the yesterday's FOMC meeting minutes? Nothing … Fed came up with the same old story. As a result, the already priced in USD dropped to support the Gold.
Quick Technical View
Keeping the fundamentals in mind, we can see the Gold is heading upward. The bullish candles are really strong and clearing showing investors bullish bias. But wait, the metal is reaching the 38.2% Fibonacci resistance at $1,297. Yup, look at the daily chart of Gold.
Gold – Daily Chart – Fibonacci Trading
At the same time, the stochastic indicator is entering the overbought zone. Both of these facts are signaling that the bullish trend may halt for a while as investors need to take profit.
Gold // XAUUSD – Trading Plan
Today, I'm looking to short Gold at $1,297 with a stop loss above $1,300 and a take profit at $1,290. While on the lower side, $1,289 is a level that can give us a buy entry. Fellas, it's a bit risky trade as the economic events like PPI and Unemployment claims are on the docket. Good luck and keep following us more existing analysis and trading signals.