USD Sideways, Awaits the Fed “Interest Rate”

Summary:

The USDX was not too volatile on the first day of this week, January 30. The USDX fluctuated slightly and is currently up 0.04%.

SELL XAUUSD

Close Time

CLOSED

1924.00

Entry Price

1915.00

1932.00

4117.20 -142.84 -3.35%

90.0

Pips

Profit

1915.00

Exit Price

1924.00

Entry Price

1932.00

Fundamentals

This week, the Fed will release the minutes. Experts predict that the Fed will raise interest rates by 0.25% bps and bring the federal funds rate to 4.75%.

The U.S. CPI and PPI indices in the final months of 2022 have somewhat overshadowed the Fed's aggressive interest rate hikes, despite Fed officials constantly talking about the prospect of raising interest rates.

We need to recognize that the economy cannot withstand the strong post-pandemic pressures. If the interest rates increase too quickly, it will hurt the economy and will drive the U.S. economy into recession. This is not what American politicians and economic planners want to see.

Gold futures fell moderately in Asian markets on Monday and the prices are around $1,927 per ounce. The most notable event in the gold market this week is the Fed meeting on February 1, followed by Fed Chair Jerome Powell's press conference. Sean Lusk, co-head of Walsh Trading, pointed out that many people are talking about the possibility that the pace of Fed interest rate hikes could slow down, but the Fed could surprise people with its hawkish attitude.

Technical Analysis

DXY is in the support area of 101.1427-102.4765, which is also the support area of the D1 frame. This support is considered strong support for DXY, according to the previous bullish market structure.

From technical analysis, the dollar has fallen sharply, which may form a bottom sideways structure, and the price may continue to drop. It is likely to be a pullback in this area, pending the release of the actual interest rate.

The focus is still on the Fed's real interest rates. If the Fed properly assesses inflation issues with its favorite data such as CPI and PPI, interest rates will be lower and the dollar will continue to fall. It is also impossible to ignore the scenario that the Fed's unexpected "hawkishness" leads to a sharp rise in the dollar.

For XAUUSD, gold prices also retraced to the downside after a slight gain in DXY, dropping to $1,924.016. The short-term 1920 area is acting as temporary support.

The price has broken this area and is corrected again. Gold will be supported if the Fed interest rates go lower. XAUUSD：USD Sideways, Awaits the Fed “Interest Rate”_1

XAUUSD：USD Sideways, Awaits the Fed “Interest Rate”_1

XAUUSD：USD Sideways, Awaits the Fed “Interest Rate”_2

Trading Recommendations

Trading Direction: Short

Entry Price: 1924

Target Price:1915

Stop Loss: 1932

Support: 1920, 1923

Resistance: 1935, 1940

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