At the last FOMC meeting, for the first time since 2008, it was decided to reduce the interest rate by 0.25%. According to the regulator, this decision was taken as a preventive protection of the American economy from the negative impact of external factors associated with the deterioration of the situation in international trade and the slowdown of the global economy.
Despite the interest rate cut, the US dollar reacted positively to the results of the FOMC meeting, because, contrary to the expectations of many investors, the regulator positively assessed the state of the US economy and announced a very cautious approach to further easing monetary policy. The Fed does not exclude further rate cuts, but does not consider the current decline as the beginning of a sufficiently long period of monetary easing.
Against the backdrop of the growth of the dollar index to two-year highs, the price of gold is actively declining, updating two-week trading lows. But factors positively affecting gold remain on the market, primarily related to high geopolitical risks (a difficult situation in international trade, Brexit, etc.), which will partially compensate for the dollar’s pressure on the yellow metal.
On the chart, there was a breakdown of support at the level of 1415.00. The next stop is expected at 1400.00. If buyers are unable to maintain this level in the medium term, we can again see the price at 1383.00.
Resistance Levels: 1415.00, 1438.00, 1450.00;
Support Levels: 1400.00, 1383.00, 1332.00.
The main scenario is a decline to 1400.00 and a correction up.
An alternative scenario is a breakdown of support at 1400.00 and decline to 1383.00.
A negative news background prevails on the market, so within the day we give preference to shorts, which are worth looking for in the range of 1415.00-1419.00.