Gold Hovers Around $1,740 mark, Markets Eye on Fed Chair Powell’s Testimony Day 01; March 23, 2021

U.S. Fed Chair Powell’s Testimony

The key event for the day will be U.S. Fed Chair Powell’s Testimony scheduled at 1400 GMT/1930 IST. As head of the central bank, which controls short term interest rates, he has more influence over the nation’s currency value than any other person. Traders scrutinize his public engagements as they are often used to drop subtle clues regarding future monetary policy. Fed Chair Powell along with Treasury Secretary Janet Yellen will speak on the quarterly CARES Act report before the House Financial Services Committee, via satellite.

Points to keep in mind ahead of Fed’s Testimony:

• Fed’s Testimony will lasts for 2 days and today is the first day of it.
• Rising bond yields is concern now as the 10-year yield reached a high of 1.75% in previous week, its highest in 14 months.
• The majority of Fed officials did not see any interest rate hikes through 2023.
• The Fed will target an average range of inflation around 2 pct.
• CARES Act is about to complete 1 year soon. It is especially for Coronavirus Aid, Relief, and Economic Security Act.
• Fed Chair sees improved conditions.
• The path of the U.S. economy continues to depend on the course of the virus.
• Since January 2021, the number of new cases in U.S., hospitalizations, and deaths has fallen.
• Ongoing vaccinations suggest hope for a return to more normal conditions by the end of this year.
• As with overall economic activity, conditions in the labor market have recently improved. Employment rose by 379,000 in February,
• Fed recently extended the PPPLF (Paycheck Protection Program Lending Facility) for another quarter to continue to support the PPP (Paycheck Protection Program).
• Fed has committed to use its full range of tools to support the economy.

Let’s see how Gold has reacted during the previous data release:

Feb 23/24; 2021:

Dec 01/02; 2020:

Technical View:

XAU/USD (Gold): The Gold moves in rigid boundaries and consolidates around $1,740 mark. The pair made intraday high at $1,740 mark and low at $1,731 mark. A day chart with triple EMA confirms the bearish trend while H1 chart suggests slightly up trend. The pair faces key hurdle at $1,742 mark. A sustained close above on H1 chart requires for the upside rally. In addition, a sustained close above $1,745 on a day will check further resistances too. Alternatively, reversal from key resistance will drag the parity down back below $1,722 mark.

Key Resistances: $1,742, $1,748, $1,754, $1,762, $1,767

Key Supports: $1,728, $1,722, $1,715, $1,708, $1,702

Take a look and do trade wisely!
Good Luck