Gold: Downside Pressure Increases after Hawkish Fed and Upbeat US data

Technical analysis of Forex market

Spot Gold holds in red for the second consecutive day and broke below psychological $1200 support on Thursday.

As expected, US interest rate change sensitive gold reacted negatively after Fed announced the third rate hike this year on Wednesday and signaled further policy tightening, which inflated the greenback.

Upbeat US data today added to bullish dollar’s outlook and pushed yellow metal’s price further down.

– advertisement –

Fresh weakness today dipped below 50% of $1160/$1214 recovery leg, suggesting that corrective phase might be over.

Falling thick daily cloud limited recent upside attempts and continues to weigh on near-term action.

Daily Ichimoku studies turned to bearish setup and along with rising bearish momentum, maintain downside pressure.

Fresh bears eye pivotal support at $1180 (Fibo 61.8% of $1160/$1214), clear break of which is needed to confirm lower top at $1214 and turn focus towards key support at $1160 (16 Aug low) the lowest since early Jan 2017.

Cluster of converged daily SMA’s (10/20/30) marks solid resistance at $1198, along with broken $1200 level, which are expected to cap stronger upticks and maintain bearish bias.

Res: 1192; 1198; 1200; 1206
Sup: 1183; 1180; 1172; 1160