FXOpen
Gold plunged sharply on Friday, during early Asian session, dragging the price of yellow metal to less than $1210 and threatening the crucial trendline support. The technical bias has turned bearish in the long run because of a Lower Low in the ongoing downside wave on daily chart.
Technical Analysis
As of this writing, the yellow metal is being traded near $1208 an ounce. A support may be noted $1200, the confluence of psychological number and huge horizontal support area. A break and daily closing below the $1200 support zone shall incite renewed selling interest, validating a move towards the $1160 and $1050 support zones.
On the upside, the precious metal is expected to face a hurdle near $1241, the short term resistance area ahead of $1297-$1300, the confluence of psychological number as well as a major horizontal resistance and then $1337, the high of the giant bearish candle which was emerged after the US elections. The technical bias shall remain bearish as long as the $1241 resistance area is intact.
Yellen Speaks
Federal Reserve Chair Janet Yellen signaled the U.S. central bank is close to lifting interest rates as the economy continues to create jobs at a healthy clip and inflation inches higher. A rate hike “could well become appropriate relatively soon if incoming data provide some further evidence of continued progress toward the committee’s objectives,” Yellen said in the text of testimony she is scheduled to deliver Thursday in Washington before Congress’s Joint Economic Committee.
Trade Idea
Considering the overall technical and fundamental outlook, selling the yellow metal on a breakout through the $1200 support zone appears to be a good strategy in short to medium term.
Trade global forex with the Innovative Broker of 2022*. Choose from 50+ forex markets 24/5. Open your FXOpen account now or learn more about trading forex with FXOpen.
* FXOpen International, Innovative Broker of 2022, according to the IAFT
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
Latest from Forex Analysis
Latest articles
Market Analysis: American Currency Rises Sharply after Fed Meeting
As expected, the decision on the interest rate had a powerful impact on the markets. Thus, the euro/US dollar pair lost more than 100 pp in just a couple of hours and updated its recent low at 1.0630,
Oil Analysis: Finally, A Bearish Reversal?
The policy of OPEC+ countries to voluntarily reduce oil production was one of the drivers thanks to which the price of WTI oil increased by approximately 40% from its low in June. In such cases, it is appropriate to use
Central Bank Week Shakes Up Gold Market
Yesterday, the main event of the week took place — the Federal Reserve meeting, which had a noticeable impact on the market of assets denominated in US dollars. But besides the Fed meeting, there are a number of other events this