The yellow metal edged lower and probably made a double top at $1,214.70. At yesterday’s session, the metal managed to made a higher low at $1,176.80, whereas the previous low was at $1,174.90 rounded to $1,174.00. The FOMC meeting delivers a hawkish stance on the US economy. The first quarter slow growth was a temporary event. It makes traders shift to book profit. At yesterday’s session, the US jobs data surpassed expectations.That was the lowest level for initial claims since April 15, 2000. This factor added more pressure on the metal and turned the bullish signals on the US economy. Today, traders are focused on ISM manufacturing PMI data. In 2015, the four months readings were printed below expectations. The manufacturing PMI was at 58.7 in December 2014. This has been the best reading so far for the 5-months. The reading fell to 51.5 in April 2015 from 58.7 in December 2014. 59.00 was the highest figure in September and November 2014. The lowest reading was 49.00 in June 2013. Due to the weekend and trading at lower levels, we can expect some short covering, in case the US delivered weak ISM data. The technical resistance seems at $1,191.00 50Dsma, $1,198.00 20Dsma, and $1,200.00 uneconomical level. The daily RSI and stochastic indicated bearish signals. We recommend fresh selling below $1,174.00 with targets at $1,167.00 and $1,164.00 initially. The price has been consolidating for 4 weeks between $1,178.00 and $1,223.00. Finally, it gave a break on the downside and made a double bottom in the four-hour chart and changed the direction. The current trading pattern is formed between $1,174.00 and $1,200.00. Until the price closes below $1,200.00, the probability of another break on the lower side is high. At an intraday session, we recommend buying above $1,185.00 with small targets at $1,189.00, $1,192.00, and $1,195.00. In the latter case, it can retest $1,197.00 and $1,200.00. Similar to the US jobs data, if ISM data also comes as a surprises to traders, another panic will be triggered. In this case, we recommend selling below $1,180.00 with targets at $1,177, $1,174.00, $1,167.00, and $1,164.00.
The material has been provided by InstaForex Company – www.instaforex.com