Gold is trading with moderate losses on Wednesday, snapping a three-day winning streak amid a somewhat firmer US Dollar. The Precious metal has returned to the $3,760 area, although it remains at a short distance from the $3,791 record high reached on Tuesday.
The US Dollar is drawing some support from Fed Chair Jerome Powell’s comments on Tuesday, warning against market hopes of a steep monetary easing cycle. Powell reiterated that the Fed is in a challenging position trying to navigate higher inflationary risks and a softening labor market, and that the bank is likely to move slowly on rate cuts.
Technical Analysis: Gold seems ripe for a bearish correction
Gold is trading with moderate losses on Wednesday, snapping a three-day winning streak amid a somewhat firmer US Dollar. The Precious metal has returned to the $3,760 area, although it remains at a short distance from the $3,791 record high reached on Tuesday.
The US Dollar is drawing some support from Fed Chair Jerome Powell’s comments on Tuesday, warning against market hopes of a steep monetary easing cycle. Powell reiterated that the Fed is in a challenging position trying to navigate higher inflationary risks and a softening labor market, and that the bank is likely to move slowly on rate cuts.
From a technical perspective, Gold seems ready for a healthy correction, following a nearly 15% rally from mid-August lows. The 4-hour RSI has retreated from overbought levels, and the MACD is crossing below the signal line, suggesting the possibility of a deeper pullback.
Bears, however, will have to push the pair below the intra-day low, at $3,750, and Tuesday’s low, at $3,736. Further down the previous all-time high, in the area of $3,700, would come into focus.
On the upside, Tuesday’s high, at $3,790, and the psychological level at $3,800 are likely to test any potential bullish reaction. Beyond here, the 261.8% Fibonacci retracement of the mid-September pullback, at $3,828, emerges as the next target.
From a technical perspective, Gold seems ready for a healthy correction, following a nearly 15% rally from mid-August lows. The 4-hour RSI has retreated from overbought levels, and the MACD is crossing below the signal line, suggesting the possibility of a deeper pullback.
Bears, however, will have to push the pair below the intra-day low, at $3,750, and Tuesday’s low, at $3,736. Further down the previous all-time high, in the area of $3,700, would come into focus.
On the upside, Tuesday’s high, at $3,790, and the psychological level at $3,800 are likely to test any potential bullish reaction. Beyond here, the 261.8% Fibonacci retracement of the mid-September pullback, at $3,828, emerges as the next target.
