On the 1-hour chart, Gold (XAU/USD) is trading above the 200 EMA and above the 21 SMA, fueled by the rally that started after the Federal Reserve's decision.
Fed Chairman Jerome Powell said explicitly yesterday that the US central bank is not considering an interest rate hike of 0.75% in June, which sounds less aggressive than the markets expected.
The Dollar index (USDX) is likely to make a technical correction in the coming days, because it is overbought on the daily chart.
The US dollar is expected to rise in the next few hours and cover all the movement caused by yesterday's FED announcements. After this pullback, a technical correction is expected in USDX, which could favor Gold and it could trade back around the 200 EMA at 1,930 (H4).
Another factor that could favor a rally in gold is that US Treasury yields are falling below their annual high. This could favor a recovery in gold in the coming days.
Meanwhile, gold is likely to have a technical correctional move in the next few hours and may reach the support of 6/8 Murray around 1,875.
On the 1-hour chart, we can see that gold left a gap around 1,881. If it manages to return below the 200 EMA located at 1,893, the price is likely to fall and cover this gap and even reach the support at 1,875.
Our trading plan for the next few hours is to sell gold below 1,893 with targets at 1,881 and 1,875. Conversely, as long as gold trades above 1,895, we could buy with targets at 1,900, 1,907, and 1,919.
