Today, Fed confirmed they have reached their inflation targets and will proceed with rate hikes at least three times next year including tapering. Ahead of time, we can expect some market moves as the market usually moves with what is expected than what is really happening.
Overall Gold is playing inside a large descending channel after the huge bullish wave we experienced last year which peaked at $2062. In the bigger picture, we can see a long-term correction within the market, this included the first bearish impulse wave prior to forming the blue highlighted triangle pattern shown below.
As you can see the market is currently correcting inside that triangle pattern indicates that we may expect another bearish low once it breaks out of that pattern.
Long term target can be expected up the $1513 which is a confluence between 3 factors, equality of the first bearish wave of this correction, 61.8% Fibonacci Retracement of the previous bullish move and finally this is also a support region.
First target I would seek for price to aim towards using the 50% Fibonacci Retracement as a dynamic support zone.
The breakout may not be as simple as we hope it to be. At the end of the day, we are working on a higher time frame move so it may take some time to break the coil.
Although we can see a potentially breakout as it reaches the lower bound of the pattern, we may also experience another bounce before a breakout like the one you can see below’s example.
To sum it up, we can see the market is preparing for a big move, ideally to the downside but nevertheless we should keep an eye out on the ceiling. I would be worried if the price breaks the $1860 region.