Technical Analysis: Gold prints falling wedge on FOMC day

Technical Analysis: Gold prints falling wedge on FOMC day

Despite battling with 200-HMA, gold stays inside a bullish chart formation on a key day. Also favoring the metal buyers is a one-week-old rising trend line and likely US dollar weakness due to the expected dovish comments from the US Federal Reserve. However, sustained trading beyond $1,855 becomes necessary for the bulls to target $1,875 and then head towards the monthly peak surrounding $1,960. During the run, the $1,900 round-figure can play its role to test the upside momentum.

Meanwhile, the stated support line near $1,843 and the lower end of the wedge, at $1,842 now, can restrict the yellow metal’s short-term downside before $1,830. Should the gold bears remain dominant past-$1,830, coupled with a surprise US dollar strength, the monthly low near $1,803 holds the key to heavy fall targeting November bottom close to $1,764. It should be noted that market consensus favors no rate action from the US central bank but downbeat statements and weak economic forecasts can’t be ruled out. As a result, a surprise move, like cautious optimism due to covid vaccination in the Fed’s tone can propel the US dollar and back the gold sellers.

Trade Forex with MTrading

Join us on FB and Twitter to stay updated on the latest market events.