Gold loses momentum, edges lower toward $1300


  • US Dollar Index recovers to mid-96s.
  • European equity indices post losses on Wednesday.
  • Markets are focused on FOMC announcements.

After meeting resistance near $1310 area yesterday, the XAU/USD pair reversed its course on Wednesday and eased from its weekly highs as the greenback gathered some strength ahead of the critical FOMC decisions. As of writing, the pair is trading at $1303, losing 0.22% on a daily basis.

The US Dollar Index, which posted daily losses for the seventh time in the last eight trading days on Tuesday, staged a modest recovery today and was last seen adding 0.05% on the day at 96.46. However, the lack of fundamental drivers suggests that the index is making technical movements, which are unlikely to gain momentum ahead of the Fed's announcements. 

In a recently published article, TD Securities analysts said that they anticipate the dot plot to suggest one more hike (to neutral) this year, and potentially no additional hikes in 2020 based on recent comments from several Fed officials. “More clarity about when runoff ends, and the size of the balance sheet at that time, should be forthcoming, if not in a separate statement then as part of Powell's press conference. Look for a neutral market reaction, as outright rate cuts are priced for 2019,” analysts added.

On the other hand, reports of BMW warning investors of a significant drop in profits in 2019 weighed on major European equity indexes today and hurt the market sentiment, helping the pair float above the $1300 handle. At the moment, Germany DAX is losing more than 1% on the day and the Euro Stoxx is down around 0.6%.

Key technical levels

XAU/USD

Overview
Today last price 1303.6
Today Daily Change -2.93
Today Daily Change % -0.22
Today daily open 1306.53
 
Trends
Daily SMA20 1306.62
Daily SMA50 1304.76
Daily SMA100 1272.91
Daily SMA200 1240.01
 
Levels
Previous Daily High 1310.92
Previous Daily Low 1302.6
Previous Weekly High 1313.3
Previous Weekly Low 1290.6
Previous Monthly High 1346.85
Previous Monthly Low 1300.1
Daily Fibonacci 38.2% 1307.74
Daily Fibonacci 61.8% 1305.78
Daily Pivot Point S1 1302.44
Daily Pivot Point S2 1298.36
Daily Pivot Point S3 1294.12
Daily Pivot Point R1 1310.76
Daily Pivot Point R2 1315
Daily Pivot Point R3 1319.08

 

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