Summary:
- Markets await release of FOMC minutes
- EURUSD is trading below the neckline of a double top pattern
- Could GOLD resume an upward trend?
-
US500 pulls back from key resistance at 3126 pts
Undoubtedly, release of FOMC minutes is a key event of the day. The question is whether the Federal Reserve is considering more easing in 2020 or is the US central bank done for now. Minutes will be published at 7:00 pm GMT and one should expect elevated volatility following the release.. In this analysis we take a close look at 3 markets that may be impacted: EURUSD, Gold and US500.
EURUSD
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Create account Try a demo Download mobile app Download mobile appLet's start with the most popular currency pair - EURUSD. The pair has been trading in a downward trend for a long time. Recent upward correction was halted at the 1.1175 resistance zone after matching the range of an upward impulse from May 2019 (red lines on the chart below). Sellers failed to break above this level twice and, in turn, a double top surfaced on the chart. Subsequent pullback brought the pair below the neckline of the pattern (1.1065), confirming the bearish sentiment. Potential range of this pattern points to a 1.0935 handle.
EURUSD D1 interval. Source: xStation5
Gold
Taking a look at the gold market at a daily frame, one can see that the price bounced off the support at 38.2% Fibo level of the upward impulse started in May 2019. Lower limit of the Overbalance structure is a key level to watch for now. Recent bounce higher brought the price to this hurdle and break above could hint at resumption of an upward trend. However, traders should wait for a confirmation - close of the daily candlestick. Should today’s trading finish above the $1474 handle, an upward move towards the resistance area at $1518 could be triggered. On the other hand, failure to do so could hint at retest of the aforementioned 38.2% Fibo level, which is the nearest support to watch.
Gold D1 interval. Source: xStation5
US500
Last but not least, the US stock market will be impacted by FOMC decision as well.. Taking a look at S&P 500 (US500), one can see that the index failed to break above the resistance marked with the 161.8% exterior retracement of September-October correction. Given that the bearish pinbar candlestick was painted yesterday, chance of a downward correction increased. In such a scenario, the first target for sellers could be the lower limit of the Overbalance structure (3055 pts). Nevertheless, one should keep in mind that the main trend on the US stock market remains upward as long as the price holds above the 3030 pts handle.
US500 D1 interval. Source: xStation5
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