GOLD Has More Room Towards Downside

The US dollar traded lower against a basket of currencies, including the Euro and the British pound which is kind of usual ahead of the fed interest rate decision which is lined up today. However, GOLD moved lower and continued to struggle during the past couple of sessions. GOLD buyers failed to break a critical swing resistance area around the $1240 level, which resulted in a move lower. Today, there are several important releases lined up in the US, which might ignite a lot of volatility in GOLD. There is a chance that GOLD might struggle during the upcoming session and continue to trade lower.

There is a bearish trend line formed on the hourly chart of GOLD where buyers recently struggled to take the prices higher. There are many bearish signs aligning in favour of sellers as the 100 and 200 hour moving averages are just around the mentioned trend line. The hourly RSI is well below the 50 mark, which means that more downside is likely in the near term. If GOLD jumps from the current levels, then initial resistance can be seen around the 50% fib retracement level of the last drop from $1223 high to $1187 low. Any further strength might find sellers around the $1206-10 level where there is a confluence of trend line and moving averages.

On the downside, the first support is around the last low of $1187. A break below the same could take GOLD towards the $1265-60 support area.

Overall, one might consider selling rallies as long as the pair is trading below the 100 MA.

————————————-
Posted By Simon Ji of IKOFX