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GOLD struggle continued this week, as there is a major risk event coming up today. The fed interest rate decision will be announced, which as the potential to cause a lot of action in GOLD. There are several resistances on the way up for GOLD, which mean the chances of it moves lower is a lot higher than moving upwards. GOLD needs a solid reason to trade higher, and fed can spark it if they stay away from hinting about a possible rate hike soon. Let us see how it trades in the coming sessions. There is a major support on the downside around $1140-50 where sellers might struggle moving ahead.
There is a monster bearish trend line formed on the hourly chart of GOLD, which acted as a hurdle for GOLD many times. There is one more obstacle on the upside, as the 100 hour simple moving averages is sitting below the trend line. So, if GOLD moves higher, then initial resistance is around 100 MA, followed by the trend line. Moreover, the 50% fib retracement level of the last leg from $1170 high to $1142 low is also aligned around the highlighted trend line. So, in short it won’t be easy for GOLD buyers to take it higher in the near term. Let us see how it trades moving ahead.
If GOLD moves lower from the current levels, then the most important support is at $1140, which if breached might open the doors for a test of $1120.
Overall, one might consider selling rallies in GOLD as long as it stays below the stated trend line.