Gold futures are trading lower on Wednesday as investors prepare for today’s U.S. Federal Reserve monetary policy announcements and economic projections. The Fed is expected to leave its benchmark interest rate and monetary policy statement unchanged. However, it is expected to make changes to its economic projections. Look for the Fed to reduce the number of expected rate hikes from two to one. The Fed is also expected to announce its highly anticipated plan to reduce its massive balance sheet.
At 11:42 GMT, April Comex gold is trading $1304.10, down $2.40 or -0.18%.
A dovish Fed should be bearish for the U.S. Dollar and bullish for gold. However, the only thing investors can be certain of at this time is heightened volatility.
Daily Technical Analysis
The main trend is down according to the daily swing chart. However, momentum is trending higher. A trade through $1280.80 will signal a resumption of the downtrend. The main trend will change to up on a trade through $1349.80.
The minor trend is up. This is controlling the momentum. A trade through $1310.80 and $1311.60 will indicate the momentum is getting stronger. A trade through $1292.50 will change the minor trend to down.
The short-term range is $1280.80 to $1311.60. Its 50% level or pivot at $1296.20 is controlling the direction of the market today. Holding above this zone is helping to give it an early upside bias.
The main range is $1349.80 to $1280.80. Its retracement zone at $1315.30 to $1323.40 is the primary upside target. It is acting like resistance.
Daily Technical Forecast
Based on the early price action, the direction of the April Comex gold market the rest of the session is likely to be determined by trader reaction to the downtrending Gann angle at $1309.80 and the uptrending Gann angle at $1298.80.
Taking out and sustaining a rally over the downtrending Gann angle at $1309.80 will indicate the presence of buyers. This could trigger a surge into the 50% level at $1315.30, followed by the uptrending Gann angle at $1316.80.
Overtaking $1316.80 will indicate the buying is getting stronger with the next targets a Fibonacci level at $1323.40 and a downtrending Gann angle at $1329.80.
A sustained move under the uptrending Gann angle at $1298.80 will signal the presence of sellers. The first target is the 50% level at $1296.20. This is a potential trigger point for an acceleration into the uptrending Gann angle at $1289.80. This is the last potential support angle before the $1280.80 main bottom and the major 50% level at $1279.60.
This article was originally posted on FX Empire
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