The precious metal has finally broken under 1285.00 and left the 1300.00 zone behind. The FOMC and ECB meetings last week provided the catalyst for the breakout. Volatility diminished to for a Bearish Pennant Pattern in the lead into the meetings but FOMC pushed price out the top of the pattern before the reaction to the ECB resulted in a selloff from 1309.00. Technical’s are always reduced in importance around big central bank meetings and become secondary indicators until price settles down. The supporting blue trend line managed to arrest the decline last week but this is being tested today and yesterday. A drop to 1250.00 or even 1240.00 remains on the cards with support at 1265.25 on the way.
Resistance can be seen at 1277.00 initially, with 1285.00 above followed by the 1289.50 level. From there the moving averages come into play on the 4 hour chart with the 50 period at 1287.75 and the 100 period at 1292.55. The red trend line is located at 1294.50 above which the 1300.00 and the 200 period MA dominate the chart. Buyers are waiting for a discount on prices around 1250.00 and they will want to drive price back to 1365.00 from that area. The 1240.00 area is the target from the double top at 1365.00.