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Gold Price Action Testing Support zone of the Trading range

Gold Prices are trading near the lows as concerns about Interest rate hike by US central bank FED weighed on the Precious metal. Investors are convinced that rate increase might come sooner than expected and might strengthen the US dollar. Recently Price Action closed at lowest level since June 23, the day before Brexit dominated the global markets. Market is testing the support zone around 1310.00. Rate hike expectations continued to depress gold prices over few weeks.

Gold Price Action Testing the Support Zone at 1310.00

Gold’s Price action testing the support zone – Watch out for trading setup

The Support zone around 1310.00 has some significance, because gold tested and bounced higher from these levels during July. Price Action marched higher after touching the support zone around 1310.00. Currently the market is testing the support zone again and resulting price action will develop a feed back loop. On Friday, after Fed chair Janet Yellen said that case for rate increase has strengthened; Markets responded instantly while Gold spikedcausing some liquidity restrains.

Gold Technical Analysis – Channel Formation in Place on 4h Chart

Gold Lower time frame Price Action before and after FED testimony

Observing the Market structure on 4h chart, Price Action is trading within a channel formation. Prices are moving within these channel formation. Sellers were dominating the market sentiment before Janet Yellen’s testimony; we can conclude based on clues in price chart. After Jackson Hole speech, markets reinstated the selling pressure. Going forward, Gold prices will be driven by Economic data and remarks by FED. Traders should focus on price behavior in the channel formation, to read the structural clues before and after the test at support zone 1310.00 of the higher time frame trading range.

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