The US dollar (USD) as per the DXY Index trades with 0.20% gains following the Federal Reserve decision to hold its rates steady. By leaving interest rates steady and removing wording regarding potential rate hikes, The Feds reiterate that inflation remains elevated and that economic acticvity continues to expand at a robust pace.
Powell’s push back against rates cuts in March trigger gold to trim initial gains driving the yellow metals prices towards day lows. At the time of writing, XAU/USD showcases volatility within the $2030- $2040 margin.
Technical analysis of the daily charts reflect mixed bag of signals.Looking at the Relative Strength Index (RSI) a negative slope emerges despite being in positive territory. Indicating a dwindling bullish momentum, buyers losing strength. Moving Average Convergence Divergence (MACD) presents a similar view as the diminishing green bars could suggest that buying momentum is struggling to keep up its pace.The Simple Moving Averages (SMAs) reveal a somewhat bearish scenario in the larger picture. The DXY's position under both the 100 SMAs showcases the bears' dominance in medium time frames. However, the index still remaining above the 20-day SMA reinforces that the bears still aren’t fully in command and will act as strong support in case of further downward movements. If the buyers manage to defend the 200-day average, the downside will be limited.