SPOT GOLD – action is directionless ahead of Fed Chair Powell testimony
Spot Gold trades in directionless mode on Tuesday, with the action being so far shaped I Doji candle.
Strong upside rejection at $1341and daily close below a cluster of daily MA’s (10/20/30 SMA, laying between $1333 and $1337 was negative signal, but limited downside action was seen so far.
Directionless near-term mode is supported by mixed daily studies (MA’s are in negative setup, while momentum studies are bullish).
Overall action remains underpinned by rising and widening daily cloud (cloud top lies at $1314), but recovery from $1320 (22 Feb trough) was so far limited and lacks stronger bullish signal on close above cracked Fibo 38.2% of $1361/$1320 downleg ($1336).
Traders are focusing on today’s testimony of Fed Chairman Jerome Powell, which could generate fresh signals for the greenback.
Stronger wording about increasing pace of rate hikes in 2018 would be supportive for dollar and deflate yellow metal’s price, while softer tone from Powell would have negative impact on US currency and would boost Gold’s price.
Session low at / hourly cloud base mark initial support at $1331, followed by $1326 zone (lows of 26/23 Feb) which guard $1320 trough.
Fibo 38.2% resistance at $1336 is reinforced by daily Kijun-sen and marks the first pivot ahead of $1341 (Mon high / daily Tenkan-sen) and $1346 (Fibo 61.8% of $1361/$1320).
Res: 1336; 1341; 1346; 1348
Sup: 1331; 1326; 1320; 1317