Downside risks dominated the yellow metal on Wednesday, as it closed the session with a 1.09% drop against the US Dollar. As a result, the pair breached the short-term ascending channel and subsequently rebounded from the upper boundary of a senior pattern circa 1,324.00.
The morning session was spent relatively calm within the bounds of the 55- , 100– and 200-hour SMAs. Given that the northern barrier is likewise reinforced by the monthly PP, traders might be reluctant to form significant advances during the following sessions. Technical indicators are more in favour of a fall that would guide the rate back into the breached channel and towards the 38.20% Fibo retracement at 1,316.67.
In case the opposite occurs, the pair is likely to be restricted by a two-week resistance in the 1,340.00 area.
