Technical outlook:
Gold prices dropped through fresh lows on Wednesday post FOMC around $1,895 mark before finding support again. The yellow metal has covered quite a lost ground and is seen to be trading close to $1,950 at the time of writing. Probabilities remain for yet another drop through $1,880 mark before producing a meaningful corrective rally.
Alternatively, Gold prices might have completed the initial drop at $1,895 and is underway towards $1,965 and $2,000-10 levels. Please note if the corrective wave has begun, it would ideally unfold into three waves. The first wave might terminate around $1,965-70, followed by a correction and then the next leg higher up to $2,000-10 mark.
Also note that $1,965 and $2,000-10 are close to fibonacci 0.382 and 0.618 retracement of the above bearish boundary between $2,070 and $1,895 respectively. Hence probabilities remain high for a bearish reversal if prices manage to push through that zone. Bears will remain inclined to be back in control from $2,000-10 levels going forward.
Trading plan:
Potential counter trend rally towards $1,965 and $2,000-10 levels against $1,890
Good luck!
