Hawkish Powell Beats Gold – Time to Catch Retracement
Arslan Butt • 1 min read
Gold prices remained flat during the Asian session and continued to trade in a bearish trend thus expect a retracement up to $1,322. Let’s trade Gold.
Fundamentals Review – Federal Reserve Chairman Jerome Powell
Federal Reserve Chairman, Jerome Powell remarked that he foresees the economy to be stable through the next two years and that his personal standpoint for growth has strengthened.
In response to this, after finding out the new Fed head is set to continue the hawkish policy, the bulls entered the Dollar market. We have seen massive sell-off in Gold since there is a negative correlation between Gold and Greenback.
Technical Outlook – Bullish Harmonic Playing
On the 4-hour chart below, the yellow metal Gold has formed a bullish harmonic pattern which completed it’s C to D wave near $1,313, meaning Gold can trade bullish until it completes 38.2% Fibonacci retracement at $1,322.
Gold – 240 Min Chart
However, there’s still divergence between the fundamentals and the technical indicators. To be on the safer side, I prefer to wait for a pullback in Gold before taking any trade.
Also consider monitoring the high impact economic events from the US: FX Leaders Feb 28- Economic Events Brief.
All the best!