Gold stumbles to fresh six-week low as dollar extends gains on the day

Technical Analysis

Author: Justin Low | gold

The post-FOMC reverberations continue to linger as the dollar strengthens

The greenback is pulling ahead across the board as the post-FOMC reaction looks to be gathering further momentum now in European trading.

EUR/USD is knocked down to 1.1926 as price tracks below its 200-day moving average while GBP/USD is inching closer towards a test of its 100-day moving average @ 1.3933.

But a key chart to watch is perhaps gold as we are seeing price test some key levels too:

Gold D1 17-06
Gold took a nosedive yesterday as the Fed quickened rate hike projections, falling below its 200-day moving average (blue line) and now price is starting to track below $1,800.

Of note, the drop calls into question the 50.0 retracement level and the 100-day moving average (red line) near $1,797 and that is the critical support region for gold now.

A break below that is likely to set off a run towards $1,750-70 with ETFs also joining in on the selling after digesting the FOMC meeting from yesterday.

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