The U.S. dollar continued to gain more power, against gold during yesterday’s session on the back of growing expectations that the Fed will provide more information on the table, concerned by the decline of its monthly asset purchases.
The pair of gold / U.S. dollar is exposed to a pressure, during the recent period since breaking below to the level of $1532 USD/ Ounce as the first key resistance. The market has kept on this level for more than 80 weeks – during the month of April. The Federal Open Market Committee mentioned that from official members said that, they will reduce stimulating in the coming months if the economic recovery continues.
Market investors believe that the U.S. economy is recovering steadily, and the Fed now think about an exit strategy in order to begin to reduce the stimulus package. As the market trends are driven by the expectations of final reduction, the downward movement get benefit. Yesterday, the pair of gold / U.S dollar broke the level of $1370 USD/ Ounce.
Today I will monitor the levels of 1370 and 1380 closely as I think we could be stuck in this region until the announcement of the Federal Open Market Committee and the press conference with Mr. “Bernanke” In the event of continued the downward movement to control the prices and to drag the pair will be below the level of $1360 USD/ Ounce, the next objective will be to test the $1338 or even 1320 USD/ Ounce on the long term trading. Up, the first resistance zone will be at the level of $1390 USD/ Ounce. In case of demonstrating the upward movement, and it was able to get through $1380 USD/ Ounce, the next challenge will be at 1388, 1396 and 1400 USD/ Ounce.