After the Wednesday’s FOMC meeting released some of the USD bears, prices of Gold and Silver rallied from their lows while the US Dollar Index (I.USDX) plunged to the lowest level in near two weeks. However, the US Dollar regained its strength on Thursday ignoring weaker economic details and it is trading on a negative side during early hours of the Friday while the precious metals kept trading on the positive territory.
Meanwhile, the following is a brief technical overview of Gold, Silver and US Dollar Index (I.USDX).
Irrespective of the yellow metal’s rally towards two week high, the descending trend channel continue signaling the bear trend of the Gold prices that face $1180 as an immediate resistance. On the sustained break of $1180, the $1190 and the 61.8% Fibonacci Retracement of its November 2014 to January 2015 up-move, near $1200 psychological mark, could provide strong resistance to the bullion before it rallies to $1220, 50% Fibo, and the 38.2% Fibo, near $1242. On the downside, $1160-59 is likely near support for the gold prices, breaking which the gold prices could decline towards $1140 and the $1130 mark that includes support line of the channel and the November lows. On the subsequent fall below $1130, the chances are higher that the safe haven commodity could test $1100 mark.
After the initial pullback, the Silver prices justified the falling wedge, bullion formation, breakout, and is likely heading towards testing $16.50, including 38.2% Fibonacci Retracement of its January – March decline, breaking which 50% Fibo, near $16.90, and the $17.50 are likely important resistances that could restrict the white metal’s up-move. On the downside, $16.00 and the resistance-turned-support-line, near $15.80, could provide immediate support to the Silver prices. A break of $15.80 negates the formation breakout and could again signal $15.30 support for the metal.
US DOLLAR INDEX (I.USDX)
Even if the FOMC pulled back the index from its ascending trend-channel resistance, near 100.30, the broader up-move, as signaled by the channel formation can’t be ignored. On the upside, the psychological target of 100 and the resistance line of the channel, near 100.70, could restrict near-term up-move of the index, breaking which chances are higher that the index rallies to 101.50, indicating 61.8% FE of its late January lows to recent highs. On the downside, the 97.80 and the 96.00, that includes support line of the channel, are consecutive supports for the index, breaking which the index could decline to 94.80 and 93.00 mark.
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