Gold (XAU/USD) once again showed some resilience below the $1,800 mark, instead attracted some dip-buying and reversed modest intraday losses. The momentum extended through the Asian session on Wednesday, though the upside seems limited ahead of Fed Chair Jerome Powell's semi-annual congressional testimony, according to FXStreet’s Haresh Menghani.
Set-up favours XAU/USD bulls, Powell’s testimony awaited
“Powell's remarks on the inflation figures should influence market expectations about the Fed's near-term monetary policy outlook. This will play a key role in driving the USD in the near term and provide a fresh directional impetus to the non-yielding yellow metal.”
“It will still be prudent to wait for a sustained move beyond the monthly swing highs, around the $1,818 region, before placing fresh bullish bets.
The commodity might then accelerate the momentum towards challenging the very important 200-day SMA, currently around the $1,828-29 zone. Some follow-through buying should pave the way for a move beyond an intermediate barrier, around the $1,852-55 region, towards testing the next major hurdle near the $1,870 level.”
“Dips below the $1,800 mark might continue to find decent support near the lower boundary of the recent trading range, pegged near the $1,792-90 area. Sustained weakness below might be seen as a fresh trigger for bearish traders and prompt some aggressive technical selling. The XAU/USD might then fall to the $1,775 support area, which if broken decisively will shift the near-term bias back in favour of bearish traders. The commodity might then turn vulnerable and accelerate the fall towards the $1,762-60 area before eventually dropping to retest June monthly swing lows, around the $1,750 area.”
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