Central Bank Week Shakes Up Gold Market

Yesterday, the main event of the week took place — the Federal Reserve meeting, which had a noticeable impact on the market of assets denominated in US dollars. But besides the Fed meeting, there are a number of other events this week related to central banks:
→ today at 10:30, a meeting of the Swiss National Bank took place. The interest rate remained at 1.75%, although there was a significant possibility of its increase to 2%.
→ today at 14:00 GMT+3, a decision on the Bank of England interest rate is expected;
→ news from the Central Bank of Japan is planned for tomorrow morning — there may be surprises.

An important asset that is affected by the decisions of central banks is gold. And it is not surprising that the XAU/USD chart showed a surge in volatility yesterday; moreover, new impulses may appear before the end of the week.

Bearish arguments:
→ the price tested the 1,939-1,946 area, which formed in late August – early September. Sellers asserted their dominance in that area, and yesterday the price sharply turned down, attempting to rise into this area;
→ the median line of the ascending channel can now provide resistance to the rise in gold price.

Bullish arguments:
→ rising A and C peaks are a sign of an uptrend, and the lower border of the channel can resist the onslaught of bears;
→ there is a psychological basis to expect support at USD 1,900.

So far, the bulls are holding the line near the trend line, shown in green. And if a weak rebound occurs from it, which does not exceed 50% of the downward momentum that began at yesterday’s high, the bears can gain even more confidence in their superiority.