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XAU/USD defends $1,980

- Gold price is defending the $1,980.00 support as odds for a steady Fed policy have soared.

- Downbeat US Manufacturing PMI has faded the expectations of one more consecutive rate hike from the Fed.

- The USD Index found a cushion near 102.00, however, the upside seems restrictive amid an absence of supportive indicators.

Gold price (XAU/USD) has sensed a cushion of around $1,980.00 after a gradual correction from above $1,990.00 in the Asian session. The precious metal has picked support as the odds for a steady monetary policy by the Federal Reserve (Fed) have soared. The yellow metal has gauged a cushion despite a recovery move by the US Dollar Index (DXY).

The USD Index found a cushion near 102.00 and has rebounded, however, the upside seems restrictive amid the absence of supportive indicators. Downbeat United States ISM Manufacturing PMI has faded the expectations of one more consecutive rate hike from Fed chair Jerome Powell. The US Manufacturing PMI has remained below 50.0, straight for five months, prompting expectations of a steady monetary policy to safeguard the US economy from falling into recession.

As per the CME Fedwatch tool, the odds of an unchanged interest rate decision by the Fed have soared above 56%.

Meanwhile, S&P500 futures are showing minimal losses in the Asian session, indicating signs of some long liquidation after a decent positive swing, portraying minor caution in the overall upbeat market mood.

Going forward, the US Automatic Data Processing (ADP) Employment Change (March) data will remain in the spotlight. Additions of fresh talent in the labor market are expected to land at 205K, lower than the former release of 242K.

Gold technical analysis

Gold price recovered sharply after a fake breakdown of the Symmetrical Triangle formed on an hourly scale. This indicates the presence of responsive buyers at lower levels, indicating that the downside is restricted.

The upward-sloping trendline of the chart pattern is plotted from March 22 low at $1,934.34 while the downward-sloping trendline is placed from March 20 high at $2,009.88. The Gold price is marching towards the upward-sloping trendline and it would be worth observing the price action there.

The 20-period Exponential Moving Average (EMA) at around $1,980.00 is providing support to the Gold bulls.

Meanwhile, the Relative Strength Index (RSI) (14) has slipped into the 40.00-60.00 range, which conveys exhaustion in the upside momentum.

Gold hourly chart