Fed Chair Powell repeated a few times during his testimony before the US Senate Committee on Banking, Housing and Urban Affairs that he thinks two more rate hikes this year will be appropriate. While those are hawkish comments, they are not new and have not triggered any major market reaction. Nevertheless, they also did not help halt USD appreciation that we have observed throughout the afternoon. USD is now one of the best performing G10 currencies and this is putting pressure on precious metals, including gold which dropped to levels not seen since mid-March 2023 today.
Taking a look at GOLD chart at the H4 interval, we can see that price of this precious metal made quite a decisive break below the $1,930 support zone today. This zone marked the lower limit of a recent short-term trading range ($1,930-1,970). According to classic technical analysis, such a downside breakout hints at a possibility of a downward move with textbook range of this move being breadth of the trading range, in this case around $40 per ounce. This would suggest a target of $1,890 per ounce. Declines seem to have slowed in the $1,915 area for now, which is a swing level market with price reactions from late-January, early-February and mid-March 2023. This is also the only potential support prior to the aforementioned $1,890 so failure to stop declines here may suggest that deeper drop is looming.
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Source: xStation5
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