On Wednesday, gold maintains a moderately ascending vector. The main support for quotes is provided by the dynamics of the dollar. The dollar index since the beginning of the day dipped 0.3%.
The central event of today will be the FOMC meeting, as a result of which the regulator will announce a decision on interest rates and present new economic forecasts. The vast majority of experts agree that the regulator will keep the rates unchanged. The main influence on the trading will be provided by the Fed’s economic forecasts and comments on the regulator’s further plans for the implementation of monetary policy. It is believed that the Fed will adhere to a softer tone of statements, which is likely to support gold and increase pressure on the dollar.
Also in the US today will be published May report on inflation. These data can cause a significant increase in market volatility. Experts expect a slowdown in annual inflation from 1.4% to 1.3%.
On the chart, the upward movement locally continues to develop. The immediate target is the level of 1725.00. If the bulls manage to pass this level, the next target will be the mark of 1750.00. Otherwise, we should expect a decline in quotations at 1700.00.
Resistance Levels: 1725.00, 1750.00, 1765.00;
Support Levels: 1705.00, 1670.00, 1645.00.
The main scenario is testing the level of 1725.00 and turning down.
An alternative scenario is a breakdown of resistance at 1725.00 and an increase in the direction of 1750.00.
The current fundamental background is neutral. We consider shorts with very moderate risks from the level of 1725.00.
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