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Gold Continued To Be Smashed Following Three Rate Hike Expectation News

Published 12/16/2016, 02:28 AM
Updated 01/13/2022, 05:55 AM
EUR/USD
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GBP/USD
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USD/JPY
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XAU/USD
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DX
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GC
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Monday/Tuesday:

Heading into the US Federal Reserve’s interest rate decision, we were watching this key USD/JPY resistance level:

USD/JPY Daily:
USD/JPY Daily Chart

With the interest rate hike fully priced in, it was always going to be about the Fed’s expectations for monetary policy heading into 2017. With price at a major resistance level and starting to reject, we were looking to make a play at selling some intra-day weakness.

The hourly chart in Tuesday’s blog above shows the clear risk profile we had set up.

USD/JPY Daily:
USD/JPY Daily Chart 2

As we now know, the Fed raised rates and most importantly, forecast three more hikes in 2017. Much higher than the market had expected and with this misalignment of expectation came the repricing to the upside and blew our setups away.

Wednesday:

Wednesday’s blog took a bigger picture view at how far gold has fallen over the last few months:

XAU/USD Daily:
XAU/USD Daily

This wasn’t a specific trading setup but more of a post to highlight just how decimated gold has been and still how far between major higher time frame levels price still is.

XAU/USD Daily:
XAU/USD Daily Chart

Again, same story as above where the Fed shocked the market by giving an expectation for three more hikes in 2017 and gold continued to be smashed as a result.

Still nowhere near those daily swing lows either. Commodities sure do know how to trend!

Thursday:

Thursday’s blog was a continutation of last week’s USD recap post that focused on the fallout from the Fed rate hike in the Forex majors.

EUR/USD 4 Hour:

EUR/USD 4 Hour Chart

GBP/USD Daily:
GBP/USD Daily

With the US dollar continuing to rip faces off as it pushes higher, Cable and Fiber of course are getting smashed.

EUR/USD 4 Hourly:
EUR/USD 4 Hour Chart 2

I’ve featured EUR/USD here because that support level had no chance of holding and we’ve seen some nice follow through in the intraday price action throughout yesterday and today.

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