Gold hourly chart
The Fed has warned of more jumbo rate hikes in the next couple of meetings.
The upside break of Descending Triangle chart pattern signals more gains ahead.
Gold Price (XAU/USD) is advancing firmly towards the psychological resistance of $1,900 after a strong upside move from around $1,866.00 as the announcement of the interest rate decision by the Federal Reserve (Fed) underpinned the precious metal against the greenback. The market participants have witnessed an activation of the ‘Buy on Rumor and Sell on News’ indicator, which has dragged the US dollar index (DXY) below the round level support of $103.00 strongly.
Key points from Feds policy
Fed chair Jerome Powell displayed an aggressive hawkish stance on the policy rates by stepping up the rates with 50 basis points (bps) rate hike and warned investors of more half-a-percent rate hikes in the next couple of monetary policy meetings. The Fed dictated that multi-decade inflation needs all-round restrictions to get contained. The process of balance sheet reduction will get started, which will strengthen the other quantitative tools to curb the inflation mess. Apart from that, the Fed stated that the US economy is solid enough to absorb the heat of a restrictive policy stance.
Gold technical analysis
On an hourly scale, XAU/USD has given a breakout of the Descending Triangle chart pattern on the upside. This leads to an expansion in volume and tick size after the volatility contraction. A bull cross has been displayed by the 20- and 50-period Exponential Moving Averages (EMAs), which adds to the upside filters. The relative Strength Index (RSI) has shifted into a bullish range of 60.00-80.00 from 40.00-60.00, which signals a fresh bullish impulsive wave going forward.
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