Even with the prospect of a big interest rate hike by the European Central Bank in September rising, the euro has struggled as the bloc’s energy crisis increases recession risks. 

Every time the price of the EUR/USD tries to rebound upwards, the negative impact factors remind investors that the euro will remain weak for a longer period of time.

At the beginning of this week’s trading, it tried to bounce upwards, but its gains did not exceed the level of 1.0030 and then returned to stability around the parity price again, before the announcement of the German inflation figures and the American consumer confidence reading.

At the beginning the week, the US dollar rose to the highest level in 20 years against the other major currencies after Federal Reserve Chairman Jerome Powell indicated that US interest rates will remain high for a longer period of time to reduce rising inflation. Accordingly, the US dollar index DXY, the measure of the US currency against a basket of major currencies, rose to the highest level of 109.48 in two decades.

On the other hand, the euro remained weak near its lowest level in 20 years, even with the tough statements of the European Central Bank, which strengthened the expectations of an interest rate hike in September.

At the end of last week, Powell told the central banking conference in Jackson Hole, Wyoming, that the Federal Reserve will raise US interest rates as high as needed to restrain growth and will keep them there “for some time” to lower the 2% inflation target, which is more than three times the Fed’s rates.

“Powell’s comments supported pricing a higher rate on federal funds for a longer period of time,” said Kenneth Brooks, a currency analyst at Societe Generale Bank, “the assumption that the Fed will start cutting interest rates in mid-2023 is premature,” he added.

The capital markets responded by intensifying bets for a sharper hike in US interest rates in September, with the probability of a 75 basis point hike currently at around 70%. Accordingly, US Treasury bond yields rose, with two-year bond yields reaching their highest level in 15 years at around 3.49%, which strengthened the US dollar. In his speech at the Jackson Hole Symposium, European Central Bank Board Member Isabelle Schnabel, French Central Bank President Francois Villeroy de Gallo and Latvia’s Central Bank Governor Martins Kazak all called for strong or important political actions.

Even with the prospect of a big interest rate hike by the European Central Bank in September rising, the euro has struggled as the bloc’s energy crisis increases recession risks. It is expected that the giant Russian energy company Gazprom will stop natural gas supplies to Europe from August 31 to September 2 due to maintenance.

Overall, the EUR/USD exchange rate has fallen significantly in 2022, and although factors such as the US economy and Fed policy have been an important driver of this decline, it is the rising cost of energy supply disruptions that gives most credence to bearish forecasters for some the other markets. Regarding the expected future for the Euro-Dollar, both “Rabobank” and “Nomura” expected a sustained break below the parity price in the Euro/Dollar rate during the coming months.

Expectations of the EUR/USD:

• The general trend of the EUR/USD currency pair is still downward and the stability below the parity price supports the bears’ control over the trend for a longer period of time.
• The continued concern about the future of energy in the Eurozone will stimulate the bears to further move down and therefore the appropriate support levels for the currency pair may currently be 0.9920 and 0.9845 and 0.9790 respectively.
• On today’s chart, the current performance pushed the technical indicators towards oversold levels.

On the upside and in the same period of time, breaking the 1.0200 resistance pair of the euro will be an opportunity to break the downward trend. Today the euro will react to the announcement of the German inflation figures and the dollar will react to the announcement of the American consumer confidence reading.

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A move above the resistance point at 20,500 will invalidate the bearish view.

Bearish view

• Sell the BTC/USD pair and set a take-profit at 18,500.
• Add a stop-loss at 20,500.
• Timeline: 1-2 days.

Bullish view

• Set a buy-stop at 20,500 and a take-profit at 21,500.
• Add a stop-loss at 18,000.

The BTC/USD currency pair continued slumping on Monday morning as the recent sell-off continued. Bitcoin dropped to a low of $19,788, which was the lowest level since July 14 of this year. It has fallen by more than 20% from the highest point this month.

Hawkish Federal Reserve

Bitcoin, other cryptocurrencies, and stocks dropped sharply after Jerome Powell’s speech at the Jackson Hole Symposium in Wyoming.

In his speech, Powell warned that the Fed was still concerned about the significantly high inflation in the country. As a result, he said that the bank will continue hiking interest rates in the coming months. He also hinted that the Fed will likely leave interest rates at elevated levels in 2023.

His statement came a few days after Joe Biden announced that he will forgive student debt for millions of Americans. Some analysts believe that this debt forgiveness will cost over $1 trillion in a decade. It will also likely lead to some inflation in the coming months.

Powell’s statement mirrored that of other Fed officials like Mary Daly, Neel Kashkari, and Charles Evans. Therefore, there is a likelihood that the Fed will hike interest rates by 0.50% in the coming meeting in September.

Historically, Bitcoin and other risky assets tend to do well in a period when the Fed has embraced a more hawkish tone. The recent rebound was mostly because analysts were expecting the bank to start slowing its rate hikes and even start cutting in 2023.

Bitcoin’s crash coincided with a sharp decline in American equities. The Dow Jones crashed by over 1,000 points while the S&P 500 and the Nasdaq 100 indices dropped by over 3.3%. The futures market also signals that American shares will open sharply lower.

BTC/USD forecast

The four-hour chart shows that the BTC/USD price formed a triple-top pattern in July and August. It also formed a bearish flag pattern that is shown in green. In price action analysis, this pattern is usually a bearish sign. It also moved below the 78.6% Fibonacci Retracement level and the 25-day and 50-day moving averages.

Therefore, the pair will likely continue falling as sellers target the year-to-date low of 18,624 since it seems like they are in control. A move above the resistance point at 20,500 will invalidate the bearish view.

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Since trading began this week,the price of the GBP/USD currency pair has settled around its losses towards the 1.1717 support level, its lowest since the peak of the collapse of the markets due to the Corona pandemic in 2020. The GBP/USD pair is stable around the 1.1795 level at the time of writing this analysis, waiting for anything new. The US dollar is still the strongest in the markets given the expectations for an interest rate hike and the sterling is waiting for a sharp recession and a new British prime minister.

About the performance of the GBP/USD, Mark Cogliati, Director of Global Capital Markets at Validus Risk Management, investigates the catalysts that could ultimately end the pair’s decline. Since the start of 2022, the pound has fallen 11.8% against the dollar, making it one of the worst performing currencies (in terms of spot yield) in the G10.

Only the Norwegian krone (-13.45%), the Swedish krone (-13.89%) and the Japanese yen (-15.74%) were worse off. With GBP/USD testing below $1.18 and seemingly only going in one direction, we once again find ourselves wondering how far will the pound fall and what will be the impetus to change it?

When I wrote an article on this topic last month, I pointed to the depreciation of the pound as a key factor that might prevent it from falling much further. Over the past fifteen years, the GBP/USD has not exceeded +/- 20% deviation from the “fair value”. This is still true today, with the pound currently undervalued by 19.3% (we calculate fair value using a mixed CPI/PPI model). However, those of us who can remember the days of GBP/USD will note that the British pound was overvalued for a few years before falling sharply in 2008 at the height of the global financial crisis.

With this in mind, it is not out of the realm of possibility that the pound will fall further and remain undervalued for a long time. As for the future, the narrative seems very bleak. The sterling reacted in particular to last week’s reading of higher-than-expected inflation for July (the headline CPI rose 10.1% y-o-y vs. consensus expectations at +9.8%) and Friday’s stronger-than-expected retail sales (+0.3% month-on-month vs. in the previous month’s expectations by -0.2%). With the market quickly turning to price with the prospect of further tightening from the Monetary Policy Committee, the pound sterling fell. Conventional wisdom suggests that the increased likelihood of higher rates should lead to a stronger currency, so the fact that the opposite range is true is a worrying sign for the pound.

The price collapse / currency performance in the UK is closer to what we might expect to see in emerging markets. The problem is that even with nominal rates rising, significantly higher inflation means real rates are still trending downward. An article published by Citi Bank has been picked up by the UK’s mainstream media, suggesting that UK inflation may rise above 18% amid the energy crisis (gas prices in particular).

This is an extreme forecast ,higher than the consensus (11.9%) and the Bank of England’s own forecast (13%) but at the very least, it is a scenario worth considering from a risk management perspective. It may not be out of the realm of possibility if a new prime minister takes over and ignites new financial incentives. Interestingly, looking at Bloomberg’s most recent foreign exchange forecasts, among the banks that updated their forecasts last week, the consensus for the end of the third and fourth quarters was still $1.19.

JP Morgan was a standout, seeing sterling fall to $1.14 at the end of the third quarter before recovering very slowly in 2023. What’s also interesting is that this move is not isolated to sterling. All G10 currencies have fallen against the dollar since the beginning of the year, with the euro performing very similarly to the pound. For the most part, EUR/GBP has largely traded between 0.83 and 0.86 since the start of the year (currently mid-range at 0.8450).

Expectations of the GBP/USD:

• The stability of the GBP/USD below the psychological support level of 1.2000 supports the bears’ control over the trend and warns of a stronger downward movement.
• Despite the technical indicators reaching sell saturation levels after the recent losses, the currency pair did not receive enough momentum to take advantage of this and think about buying, and it may remain so until the reaction from the Jackson Hole seminar organized by the Federal Reserve Bank, which makes Friday’s session the most important and active for the markets and the currency pair.
• Currently the closest support levels are 1.1730, 1.1655 and 1.1580 respectively.

On the upside, the stability above the 1.20 level may have a chance for the first break, and until now there will still be a gain or a rebound, an opportunity to renew the sale of the currency pair.

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The pair will likely continue falling as sellers target the next key resistance point at 1.1650.

Bearish view

• Sell the GBP/USD pair and set a take-profit at 1.1650.
• Add a stop-loss at 1.1800.
• Timeline: 1-2 days.

Bullish view

• Set a buy-stop at 1.1800 and a take-profit at 1.1900.
• Add a stop-loss at 1.1700.

The GBP/USD price retreated after a series of worrying news about the UK economy and as volatility jumped. The pair dropped to a low of 1.1742, which was the lowest level since March 23rd this year. It has dropped by over 17% from the highest point this year.

Worries about the UK economy

The GBP/USD currency pair retreated sharply after some worrying economic numbers from the UK. In a report on Monday, Citigroup said that the country’s inflation will hit about 18.6% in January. If this happens, it will be the biggest increase in almost 50 years.

The investment bank attributed the sharp increase of inflation to the soaring wholesale gas prices. It estimates that the retail energy price cap will rise to 4,567 pounds in January and to 5,816 pounds in April next year. That will be a big increase considering that the current price is at 1,971 pounds.

The estimate by Citigroup is bigger than what the Bank of England (BoE), Goldman Sachs, and EY estimate. In its monetary policy meeting this month, the BoE estimates that inflation will start the year at 13.3%. Goldman and EY believe that inflation will be at least 15%.

The GBP/USD price also declined after the Office of National Statistics (ONS) revised the UK economic growth for 2020. In a report, the agency said that the country’s GDP contracted by 11% in 2020, the worst performance in the G7. It was also the worst contraction since 1,709. As a result, the growth in 2021 and 2022 will be staring at a lower point than estimated.

The pair also declined because of the broad US dollar strength. The dollar index rose to $109, the highest level in a month. Similarly, the VIX index, which is a good measure of volatility, rose by over 15% while stocks retreated.

GBP/USD forecast

The GBP/USD price has been in a strong bearish trend in the past few days as the US dollar strength continued. It managed to move below the important neckline of the double-top pattern.

The pair’s downward trend is being supported by the 25-day and 50-day moving averages while the Relative Strength Index moved to the extremely oversold level. It has also formed what looks like an inverted cup and handle pattern. Therefore, the pair will likely continue falling as sellers target the next key resistance point at 1.1650.

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The pair will likely continue falling as sellers target the next key support at 1.1750.

Bearish view

• Sell the GBP/USD pair and set a take-profit at 1.1750.
• Add a stop-loss at 1.1900.
• Timeline: 1-2 days.

Bullish view

• Set a buy-stop at 1.1900 and a take-profit at 1.2000.
• Add a stop-loss at 1.1800.

The GBP/USD price crashed to the lowest level since July as the US dollar rose across the board. It dropped to a low of 1.1830, which is much lower than this month’s high of 1.2288.

US dollar strength

The GBP/USD pair continued its downward trend as the US dollar staged a major rally. The greenback rose against most currencies, including the Swiss franc, euro, and Japanese yen. As a result, the dollar index, which tracks its performance against a basket of currencies, rose to the highest point in weeks.

The US dollar strength continued after Chinese data showed that the economy was weakening. Industrial production and retail sales growth was lower than estimated, pushing the PBoC to lower rates on key bonds.

The strength then accelerated after the Federal Reserve published minutes of its past monetary policy meeting. The minutes showed that the bank’s officials were increasingly concerned that inflation will become entrenched in the economy for a long time.

At the same time, the officials were worried about moving too fast and too soon on rate hikes. It has already hiked interest rates by 225 basis points this year and started implementing a quantitative tightening policy.

Federal Reserve speakers like Charles Evans, Lorretta Mester, and Neel Kashkari said that the bank will likely continue hiking in the coming meetings. Expectations are that the bank will hike by 0.50% in its September meeting.

There will be no economic data from the UK and the US on Monday. Therefore, the market will continue focusing on last week’s actions of the Federal Reserve.

The next key economic numbers will come on Tuesday when S&P publishes the flash manufacturing and services PMI numbers. Analysts expect that the PMIs made some modest improvements in August as the price of oil dropped slightly.

GBP/USD forecast

Turning to the four-hour chart, we see that the GBP/USD pair formed a double-top pattern at 1.2288 this month. It then managed to move below the neckline of this pattern at 1.2000 on August 5. The pair dropped below the 25-day and 50-day moving averages.

The Relative Strength Index (RSI) has moved to the oversold level while the Oscillator has moved below the neutral level. Therefore, the pair will likely continue falling as sellers target the next key support at 1.1750. This price is slightly below the year-to-date low of 1.1760.

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The pair will likely continue falling as sellers target the next key support level at 0.6950.

Bearish View

• Sell the AUD/USD pair and set a take-profit at 0.6950.
• Add a stop-loss at 0.7050.
• Timeline: 1-2 days.

Bullish View

• Set a buy-stop at 0.7050 and a take-profit at 0.7150.
• Add a stop-loss at 0.6970.

The AUD/USD price dropped to a low of 0.700 as the market reacted to the latest minutes by the Reserve Bank of Australia (RBA). The price was about 2% below the highest level this month ahead of the latest US retail sales and FOMC minutes.

FOMC Minutes and US Retail Sales

The AUD/USD has been in a strong bearish trend as the market waited for the upcoming US retail sales numbers. These are important data because consumer spending is the biggest part of the American economy.

Economists expect the numbers to reveal that the volume of retail sales dropped in July this year. They believe that sales dropped from 1.0% in June to 0.1% in July. In the same period, analysts expect that core sales dropped from 1.0% to -0.1% in July.

These results comes a day after the some of the biggest retailers in the country published their results. Walmart said that its revenue rose by 8.4% in the second quarter to $152.85 billion. Similarly, Home Depot, the biggest home improvement retailer, said that its net income rose to $5.17 billion. Other firms like Target and Lowe’s are expected to publish strong results.

The AUD/USD price will also react to the latest minutes by the Federal Open Market Committee (FOMC). These minutes will provide more details about the deliberations took place in its July meeting. In it, the bank decided to hike interest rates by 0.75% and continue with its quantitative tightening policy.

Most Fed officials believe that the bank will continue hiking interest rates even after last week’s weak inflation numbers. The data showed that the country’s inflation dropped slightly in June as gasoline prices dropped.

AUD/USD Forecast

The AUD/USD price dropped to 0.700, which was the lowest level since August 10. On the four-hour chart, the pair moved slightly below the important support level at 0.7050, which was the highest point on August 1st. It moved slightly below the 25-day and 50-day moving averages and the standard pivot point.

The pair has also formed a break and retest pattern by retesting the key point at 0.7050. Therefore, the pair will likely continue falling as sellers target the next key support level at 0.6950. A move above the resistance at 0.7055 will invalidate the bearish view.

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The GBP/USD exchange rate attempted to extend its month-long recovery last week, but was unable to reach a new high. It could now head into a period of neutrality with a bearish bias unless the action-packed economic calendar provides catalyst for new progress. The GBP/USD pair fell to the 1.2050 support level at the beginning of this week’s trading, and the rebound gains last week brought it to the 1.2277 resistance level.

There were multiple signs last week that a significant moderation in US inflation was approaching, albeit not enough to dissuade the Federal Reserve (Fed) from its hawkish policy stance, leading to continued interest rate risks that also limit the factors for the sterling. “The weak inflation reports have caused some understandable relief to risky assets and downward pressure on the dollar,” Michael Cahill, FX analyst at Goldman Sachs, wrote in a research briefing on Friday. “That is likely to extend a bit given the light calendar going forward and the possibility that this week’s FOMC meeting minutes will include some discussion about the FOMC’s apparent desire to slow the pace of advances soon.” But we don’t expect that to be a lasting relief.”

Data last week indicated that every official measure of US inflation was either slowing or declining in July, while separate measures of producer prices and import costs also surprised to see declines in the recent period.

Meanwhile, a New York Fed survey showed expectations of future inflation falling on all horizons last month, and a significant University of Michigan survey indicated that expectations fell on all but the longer horizons.

The problem for sterling and the dollar lies in things like staffing costs per capita, which rose 10.8% annually in the second quarter after a 12.6% increase previously and in a result that wage growth rates have slowed to a decline from their highest levels in recent decades. Taken together with the rise in long-term expectations combined with the recent reduction in market expectations for the Fed funds rate, these factors keep US inflation and interest rate risks to the upside while limiting the pound-dollar rate in its ability to recover.

“Wednesday’s retail sales report is the most popular data in this week’s calendar,” says Kevin Cummins, chief US economist at Natwest Markets. Thursday’s weekly jobless claims also require more attention, in light of the recent improvement. “We expect the minutes to confirm the additional price hike to a restrictive position that remains in place for this year,” he added. Accordingly, “we doubt that the FOMC will send any clear message whether the expectations for a rate hike in September are 50 basis points or 75 basis points.”

What’s next for GBP/USD?

A lot about how the GBP/USD price will move in the coming days is likely to be determined by a busy economic calendar that includes several very important dates for both the Pound and the Dollar. Accordingly, Juan Manuel Herrera, an expert at Scotiabank, says: “The energy crisis and the cost of living crisis indicate that there are economic headwinds awaiting the British economy, and this will limit the ability of the pound to advance.”

“The top of the range this week coincided with a test of the major resistance at 1.2275 and failure here indicates the risks of the cable returning to the 1.20 region. We notice a major support at 1.2080 in the short term.”

The UK economic outlook remains weak. The Bank of England still expects a recession to start in the fourth quarter of 2022, although the risk is closer. Employment figures will be closely scrutinized on Tuesday for clues about labor market resilience and for insight into the trend in wage growth, both of which are influential when it comes to the matter is the outlook for the Bank of England (BoE) interest rate policy. Wednesday’s UK inflation numbers are the most important for the BOE and GBP monetary policy in the short term, and this time there is uncertainty about how the market is likely to respond to upside or downside surprises.

Sterling dollar forecast:

• The GBP/USD currency pair is closest to testing the psychological support 1.2000.
• It may increase the bears’ control over the trend.
• It will prepare to test stronger support levels, the closest to them are currently 1.1975 and 1.1880, respectively.

On the other hand, and over the same time period, moving towards the resistance levels 1.2145 and 1.2300 will be important for the bulls, and in general, I still prefer to sell the GBP/USD from every bullish level.

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During the recent trading sessions, the bears tried to stop the pace of losses for the GBP/USD currency pair at the psychological support level of 1.2000 so as not to increase the currency pair’s suffering. We see that it is subject to more collapse, especially if the US inflation numbers come today. The improvement will prompt the US Federal Reserve to raise interest rates strongly until the country’s record inflation is contained.

What is expected for the sterling dollar pair in the coming days?

Sterling is likely to fall to its lowest level since the pandemic crash as the US Federal Reserve’s rate hike path continues to outpace that of the Bank of England according to Societe Generale analyst Olivier Korber. Korber wrote in a note that the Bank of England’s latest recession warning combined with rising expectations of another 75 basis point interest rate hike in the US could put sterling at risk of falling below the $1.20 support “in the very near term”.

• The British currency rose in late July on expectations that the Federal Reserve would move away from aggressive tightening.
• The recovery was cut short this month as US officials sounded more hawkish and the BoE delivered a bleak economic outlook that overshadowed a 50bp rate hike.
• The pound has fallen by 10% since the beginning of 2022 so far against the dollar, ranking third among its peers in the Group of Ten, as the path of raising interest rates by the Federal Reserve has exceeded that of the Bank of England.

The analyst added, “Recession fears are now easing in the United States, and the debate has begun about whether there will be a second consecutive increase for the Fed by 75 basis points.”

Swaps referring to Fed meeting dates were priced back to levels indicating another 75 basis point increase in September is likely to come after stronger-than-expected jobs data on Friday. If the bearish outlook for sterling continues, Korber expects the pound to fall to between $1.14 and $1.20 within a month.

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The pair will likely continue falling as sellers target this support at 0.6850.

Bearish View

• Sell the AUD/USD pair and set a take-profit at 0.6850.
• Add a stop-loss at 0.6950.
• Timeline: 1-2 days.

Bullish View

• Set a buy-stop at 0.6945 and a take-profit at 0.7050.
• Add a stop-loss at 0.6875.

The AUD/USD price retreated on Monday morning, continuing the spectacular plunge that happened on Friday last week. The pair crashed to a low of 0.6875, which was the lowest level since July 21st. It has crashed by more than 2.50% below the highest point this month.

China and Taiwan Worries

The Australian dollar declined slightly after the latest China trade numbers. According to the country’s statistics agency, China’s exports rose from 17.9% in June to 18.0% in July. This increase was significantly better than the median estimate of 15.0%. It was also a surprise because of the challenging macro environment the world is in.

At the same time, China’s imports rose from 1.0% to 2.3%. As a result, the trade surplus jumped from over $97 billion to over $101.26 billion. Analysts were expecting the country’s trade surplus to narrow to about $90 billion. These numbers are important to the Australian dollar because of the strong ties between Australia and China.

The AUD/USD dropped as worries to the ties between the US and Australia and China worsened because of the ongoing tensions on Taiwan. During the weekend, China’s government officials warned Australia against interfering on the issue. China’s military continued its drills near Taiwan in response to last week’s Pelosi’s visit.

Meanwhile, the pair also declined sharply as investors reacted to the blemish-free jobs report from the United States. Data by the Bureau of Labor Statistics (BLS) revealed that the country’s economy added 528k jobs in July after it added almost 400k jobs in the previous month. At the same time, the unemployment rate dropped from 3.6% to 3.5%.

The next major data to watch will be the upcoming US consumer inflation data. Economists expect the data to show that inflation dropped from 1.3% in June to 0.2% in July, translating to a year-on-year gain of 8.7%.

AUD/USD Forecast

The AUD/USD pair made a bearish breakout below the lower side of the ascending channel last week. The sell-off then continued after the US published strong jobs numbers on Friday. On the four-hour chart, it has moved below the 25-day and 50-day moving averages and is slightly above the important support at 0.6850, which was the lowest level on June 14th,

The pair will likely continue falling as sellers target this support at 0.6850. A drop below that support point at 0.6850 will open the possibility of it moving below 0.6800.

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The recent trading sessions are characterized by the presence of a strong and sharp struggle between bears and bulls to determine the direction of gold. The price of the yellow metal is in a range between the level of $ 1857 an ounce and the level of $ 1835 an ounce. The gold market awaits strong stimuli to determine the path, and the reaction may be to the statements of US Central Bank Governor Jerome Powell, the strongest influence on the US dollar, and therefore the price of gold. The price of gold is still looking for catalysts to rise in the face of the pace of raising interest rates from global central banks.

Last week, the Federal Reserve raised the US short-term interest rate by three times the usual amount for its largest increase since 1994. It may consider another huge increase at its next meeting in July. Last week’s report on the US economy also showed that industrial production was weaker last month than expected. Markets are preparing for a world with higher interest rates, led by the actions of the Federal Reserve. Higher rates can bring down inflation, but they also risk triggering a recession by slowing the economy. It also tends to hurt the price of stocks, cryptocurrencies, and other investments.

Accordingly, testimony on monetary policy by Federal Reserve Chairman Jerome Powell before the Senate Banking Committee and the House Financial Services Committee is scheduled for later this week.

Generally speaking, two of the three largest economies in the world, namely China and Japan, do not engage in raising interest rates, unlike the US Federal Reserve and central banks in many other countries. Fears that the global economy could slide into recession if planners push forward aggressively with higher interest rates and other moves to tighten monetary policy have sent markets tumbling after stock prices surged thanks to massive support during the pandemic.

Last week, the BoJ stuck to its near zero interest rate policy despite concerns about a weak yen.

According to the technical analysis of gold: the price of gold and according to the performance on the daily chart is still in a neutral area. The tendency will be to the downside if the investors move to the support levels of 1825 and 1810 dollars, respectively. I still prefer the trading strategy for the price of gold by buying from every bearish level, especially if it moves to break the $1800 support again. The price of gold may remain under pressure until the reaction from the testimony of US Federal Reserve Governor Jerome Powell this week.

Increasing global geopolitical tensions, fears of a global economic slowdown and the suspension of the US dollar from making gains may motivate the gold price to rise towards the resistance levels of 1855 and 1878 dollars, respectively, which are levels that stimulate the bulls’ control of the yellow metal market.