Technical Analysis: Gold looks set for further losses ahead of FOMC

Technical Analysis: Gold looks set for further losses ahead of FOMC

Gold sellers cheer a clear downside break of the monthly support line, now resistance, amid bearish MACD signals near the lowest in a week. Although RSI signals a smaller gap before hitting the oversold area, which in turn suggests the commodity’s bounce, the current declines are likely to extend, for now. As a result, an area comprising the previous resistance line and 61.8% Fibonacci retracement near $1,762-60 gains the market’s attention. However, the bright metal’s failure to bounce off $1,760 will make it vulnerable to drop towards a 200-SMA level of $1,743.

On a surprise recovery move, the stated support line, now resistance around $1,783, can guard the bullion’s short-term rise. Also acting as the immediate hurdle is the monthly top near $1,798. However, bulls should retake controls and eye the late February tops surrounding $1,816 if gold prices rally beyond the $1,800 threshold. Overall, the US dollar gain bid ahead of the Fed and hence exerting downside pressure on the yellow metal. Though, traders should remain cautious ahead of the weeks’ key event.

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