US Fed interest rate decision is due out at 2 p.m. EST on 26th of July, and this may move the Gold market strongly two hours before New York closes.
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Simple support and resistance may be used to tell in which direction Gold may move and where it may stop.
There is formidable resistance about 1,260. This was tested two sessions ago and has held. Now price has moved down and away with support from volume. This may hold if markets experience a price shock upon the release of the Fed decision. If that is the case, then Gold may whipsaw lower.
Next two areas of strong support are about 1,240 and 1,235. This may be about where Gold could end up for the short term.
The recent fall in price over the last three days does not have support from volume and this suggests a bounce should be expected here or very soon. Additionally, there is strong, bullish support for Gold’s price at about 1,260. These support the idea of upwards movement after the FED Interest rate decision.
However, the latest and now most important signal comes from On Balance Volume breaking below support. This is bearish.
Given that a technical analysis approach would expect Gold to move mostly in the direction of least resistance and away from greatest support, the expectation is for Gold to breakout upwards. But because of On Balance Volume’s bearish signal, any upside movement is expected to be relatively short lived.