Gold Turns Lower Ahead of U.S. FOMC Interest Rate Decision, $20+ Volatility Likely; July 28, 2021
U.S. FOMC Interest Rate Decision
The most watchful event for the day is U.S. FOMC Interest Rate Decision and FOMC Press Conference. Short term interest rates are the paramount factor in currency valuation – traders look at most other indicators merely to predict how rates will change in the future. FOMC Statement is primary tool the FOMC uses to communicate with investors about monetary policy. It contains the outcome of their vote on interest rates and other policy measures, along with commentary about the economic conditions that influenced their votes. Most importantly, it discusses the economic outlook and offers clues on the outcome of future votes.
It is widely expected that July FOMC statement will remain unchanged from the last one. Important to note here that the uncertainties over Delta virus is putting pressure on Fed to start tapering bond buying or not. Recently the White House said there’s “no significant signs” of economic impact from the Delta variant but if restrictions in the U.S. returns, then the outlook will darken quickly. Now have to keep an eye on FOMC statement whether Fed is putting emphasis on Delta Virus risk or Tapering? In case of virus talk, U.S. dollar likely to depreciate otherwise U.S. dollar will strengthen against major peers.
Let’s see how gold has reacted during the previous data release:
- Gold weakens and touches $1,795 mark ahead of U.S. FOMC Interest Rate Decision.
- Today pair made intraday high at $1,807 and low $1,795 mark.
- A day chart and H1 chart with triple EMA suggests bearish trend for the time being.
- A sustained close above $1,809 on H1 chart requires for the upside rally.
- Alternatively, a consistent close below $1,794 will check further supports.
Take a look and do trade wisely!