Chapter 88 11/14 XAUUSD: Bulls Are Expected to Move Further Higher with Key Support
Abstract: In the new week, the price of gold kept a good start, with a good rebound in the case of an increase in open interest contracts, which should pave the way for further rise in the short term. At the same time, the 200-day SMA temporarily continues to maintain a downward trend.
Fundamentals
The U.S. non-seasonally adjusted CPI recorded an annualized rate of 3.2% in October, a new low since July of this year.
The U.S. seasonally adjusted CPI for October recorded a monthly rate of 0%, a new low since July 2022.
The U.S. non-seasonally adjusted core CPI recorded an annualized rate of 4% in October, a new low since September 2021.
The U.S. core CPI recorded a monthly rate of 0.2% in October, a new low since July this year.
U.S. inflation generally slowed in October, an encouraging sign that the Federal Reserve is making progress on the long road to curbing price pressures.
The core consumer price index, which excludes food and energy costs, rose 0.2% from September, data from the U.S. Bureau of Labor Statistics showed Tuesday. Despite some bumps in recent months, inflation has fallen sharply from a 40-year high reached last year. That has led several Fed policymakers to signal that they may be done raising rates, but Fed Chairman Jerome Powell has repeatedly emphasized that the Fed could raise rates again if necessary.
According to CME's "Fed Watch", the probability that the Fed will keep the interest rate unchanged in the range of 5.25%-5.50% in December is 85.7%, and the probability of raising interest rates by 25 basis points to the range of 5.50%-5.75% is 14.3%. The probability of keeping rates unchanged through January next year is 73.3%, the probability of a cumulative 25 basis point hike is 24.6%, and the probability of a cumulative 50 basis point hike is 2.1%.
Following the release of the latest inflation data, gold prices soared to an intraday high of US$1,959, up from US$1,945 previously, which is in line with expectations.
Technical Analysis
At one point during the Palestinian-Israeli conflict, the price of gold surpassed the US$2,000 mark. Before the emergence of bears, the price was as high as US$2,009, and the XAUUSD price is currently on the defensive.
In the 4H timeframe, a major downtrend channel is forming, with resistance-turned-support around the US$1945 level.
The first major resistance to the uptrend is the US$1,955 level. Breaking this level may cause the price to soar to the resistance level of US$1,965. The next major resistance level is around the US$1,972 level. If it breaks through this resistance level, the price of gold could test the US$1,985 level.
On the downside, the first major support level is located near US$1,938. The main support is located near the US$1,920 level and the 200 SMA. It is close to the 61.8% Fibonacci retracement of the uptrend from US$1,867 – 2,009. Any more pullbacks will test the psychological US$1,900 level.
Trading Recommendations
Trading direction: Long
Entry price: 1985
Target price: 1920
Stop loss: 2006
Deadline: 2023-11-28 23:55:00
Support: 1941, 1938, 1920
Resistance: 1955, 1965, 1972
