- Fed's rate decision due this week
- Technicals shows more weakness for gold
We have a number of central bankers making a decision about their monetary policy but the one which matters the most is the Fed rate decision on Thursday. Although, no new action is expected from the Fed when it comes to the interest rate. But traders would like to gauge the Fed’s stance about the future rate hikes for this year.
If the Fed shows their confidence in their previous view (under which they still see two more rate hikes for this year), despite the fact that Donald Trump has raised his concerns about the interest rate, we would expect the dollar price to move higher and that would have the potential to push the price lower.
In terms of technical analysis, we have formed the double top which is a reversal pattern. The price would have to face the challenges of 100 and 200-day moving average. It is trading below these averages which gives us a clear sign of a downward trend on a four-time frame.
The first bullish sign would emerge if the price breaks the downward trend line. The support is at 1210 and break of this would open the door towards the next resistance level of $1200