- US Dollar tumbles across the board despite Fed hike.
- Gold up almost 2%, having best day in months.
- Federal Reserve raises rates as expected, upgraded economic outlook.
The US Dollar dropped sharply across the board after the Fed meeting. It accelerated the slide after Fed Chairman Powell press conference. The weak USD pushed Gold sharply to the upside.
The metal is having the best day in months. It opened the day around $1310/oz and recently broke above $1330. It peaked at $1336, the highest level since March 7.
The greenback weakened despite the positive tone from the FOMC and the dot plot projections (2 more hikes in 2018). The US central bank acted as expected. The “no hawkish” surprise could have opened the doors to the slide of the US Dollar. Chairman Powell, in his first post-meeting press conference sounded optimistic, added that the US is not on “cusp” of accelerating inflation. The neutral rate of interest is still quite low according to Powell.
Technical outlook
A consolidation around current levels (highest daily close in a month) could lead to more gains. Price is rebounding from a strong support area. To confirm the strong bullish tone price needs to break the next resistance seen at $1340. Above, attention would turn to $1350 and a potential test of 2018 highs.
A decline back below $1322 (20-day moving average) would remove the bullish tone and could clear the way for another test of the $1310 support zone.
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