Gold - Downside capped by 4-hr 100-MA, Put bias strengthens
- The Downside in Gold (XAU/USD) is being capped by 4-hour 100-MA.
- But the support could fall soon as bearish sentiment in the options market is strengthening.
The 4-hour 100-MA has acted as a strong support in the last 12 hours or so, still, the yellow metal (XAU/USD) is finding it hard to regain poise.
Meanwhile, XAU/USD one-month 25 delta risk reversals gauge fell to -0.40, the lowest level since Jan. 11. The negative print indicates rising demand for XAU puts, i.e. investors expect the yellow metal to take out the 4-hour 100-MA support of $1336.
That said, the metal may trade in the sideways manner ahead of the Fed rate decision due at 19:00 GMT today. Gold could witness a sustained moved below $1336 (4-hour 100-MA) if the Fed upgrades its language on inflation.
Gold Technical Levels
As of writing, the metal is trading at $1340/Oz levels. A break above $1343.65 (4-hour 50-MA) would open up upside towards $1348.93 (Jan. 30 high on 4-hour) and $1357.14 (Jan. 26 high on 4-hour). On the other hand, a move below $1336 (4-hour 100-MA) could yield a sell-off to $1324.32 (Jan. 18 low) and $1316.54 (38.2% Fib R of Dec-Jan rally).
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
