Early in the European session, Gold (XAU/USD) is trading around 1,936.38, below the 7/8 Murray and below the 21 SMA located at 1,947.70.
Yesterday, before the FED announcement, gold rose to 1,960.36 and after knowing the Fed's interest rate decision, gold fell towards the area of 1,940 and extended to the low of 1,932.42 at the opening of today's European session.
As expected by analysts and investors, the Fed kept the interest rate at 5.25%. This caused the US dollar to strengthen and Treasury bonds to rise. As a consequence, investors left gold as a safe haven asset.
Gold is currently under bearish pressure. We can see that it is bouncing above the daily S_1 (1,933). In the event that gold trades above this level, we could expect a recovery and the price could go up to the 21 SMA located at 1,947 and even up to the 200 EMA at 1,956.
On the 1-hour chart, we can see that gold sharply broke an uptrend line. XAU is now trading below it. In case there is a pullback towards 1,941, we could expect the bearish sequence to resume and the instrument could reach the bottom of the bearish trend channel formed since the beginning of June around 1,912.
On the other hand, in case XAU/USD consolidates above 1,941, we could expect this resistance to become a support point and this could give the metal the bullish momentum to reach 1,947 (21 SMA) and 1,956 (200 EMA), a key level that coincides with the top of the bearish trend channel.
In the next few hours, we expect a technical bounce in gold because the Eagle indicator has reached the extremely oversold zone. This could be used as an opportunity to buy only if gold continues to trade above 7/8 Murray (1,937).
