15.12.2021 | FOMC | Interest Rate Day | DOT Plot Day
As indicated on 13.12.2021: a SELL signal was generated by a set of indicators including our algorithm, and GOLD crashed from 1790 zone till 1777/1769 | TP1 and 2 achieved on H1 chart based alert too.
Gold held onto its worst daily loss since the end of November as investors weighed the latest U.S. inflation data and counted down to the conclusion of the final Federal Reserve meeting of the year later Wednesday.
Prices paid to U.S. producers posted a record annual increase of almost 10% in November, a surge that will sustain a pipeline of inflationary pressures well into 2022. This is boosting the case for the Fed to tighten monetary policy, which is weighing on non-interest bearing assets such as precious metals.
Fed policy makers could announce a doubling of the pace of its bond-buying taper and lay out a steeper path of expected interest rate hikes, according to Bloomberg Economics.
Bullion is heading for its first annual loss in three years amid diminishing monetary support from central banks, although uncertainties surrounding the impact of the new virus variant could stoke demand for haven assets. The World Health Organization is concerned that omicron is being dismissed as mild, even as it spreads at a faster rate than any previous strain of Covid-19.
As alerted on Monday, 13.12.2021:
GOLD crashed from 1791 till 1777 and 1767 (today’s S1: 1766) and yesterday’s low was 1766 too. Am sure those who took trades at 1790 zone, made decent profits.
It’s a late night event today, quite close to market closing timing, a sudden rise and dip in volumes might trigger repetition of volatility in Asian session too.
There is less space to exit in RT based trades, as per the past track record, the momentum and volatility is experienced for 30 minutes after Interest Rate Decision, the impact of FOMC is faced during the speech, Q&A session and for another 45-90 minutes after the Q&A session. However since the market closing timing will be closer, I don’t think traders will get enough space or time duration to hedge or exit in Net average, specially traders like me who trade more on retracement based price zone/FIB zones.
It will be worth observing, where and where to get in the trading positions inorder to exit in NET positions.
XAUUSD | GOLD | Analysis | Forex Trading tips | Piyush Ratnu
Though, I won’t hesitate to avoid trading today completely, in case I feel a extension of crash or price rise pattern might happen in Asian and London session next day, further getting extended to NYSE opening tomorrow.
So, summarising the same: fundamentals make technicals, so I will not rely merely on technical analysis and patterns to predict the market movement today, it is always wise to observe, analyse and then trade rather than predicting the movement on the basis of various facts. Because sometimes it doesn’t matter how many facts you consider, one small fact can change the complete trading scenario and can result in huge losses.
How to trade XAUUSD with accuracy | Trading tips | Forex Analysis | Piyush Ratnu
As per my analysis,
Scenario A: The crash zone stops are:
1745
1717
1685
1666
Further extension might trigger price to 1590 zone
Scenario B: The rise stops are:
1796 (1803 R3)
1818 (1812 R4)
1832 (1826 R5)
Further extension might trigger price to 1866/1888 zones
Year end, US China tensions, Inflation, YCC, Dollar strength, Festival – Holiday season ahead, New Year Exchange opening session, DOT plot, Rate projection and many other factors will be impacting Dollar and Gold both together in parallel/opposite and sometimes in a proportionate way.
Hence trading carefully during this session, is very important.
Aggressive trades, wrong decisions can put the complete account in big difficulty.
NAP should be the main focus, money should not be.
Saving the principle amount is the main motto.
Making higher profits is not my motive today.
Because I want to start my New Year with a clean slate, not with a floating loss.
Not to forget, last year, In January, first 20 days, Gold crashed till 1777 from price range of 1966. In such one direction based market movements, there are high chances that traders can lose their entire principle.For trading the FOMC rate decision, there are three approaches:
The first – and probably the riskiest way – is to position for more aggressive tightening by the Fed next year and take a trade before the announcement – getting out shortly thereafter. The initial move is often given back quickly as traders who took positions before the rake decision take profits after the initial release.
The second way to trade the FOMC decision is to wait about 30-45 minutes after Powell speaks, let the market make its final assessment, and buy or sell on the break of post-reaction high or low.
The third way is to simply stand down, wait for all of the dust to settle and trade at the Asia open.
Wishing us ALL THE BEST!
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