(MENAFN- Daily Forex)

• Gold has pulled back just a bit during the trading session here on Wednesday as we continue to trade in the same consolidation area.
• This is a market that's still very bullish overall but did sell off almost immediately at the open in New York, which makes sense because there's no real reason for gold to just shoot through the ceiling.
• Now, I think eventually we will see that happen, but a reversion to the mean perhaps even back to the inner consolidation area that I have marked on the chart might be doable, possibly even the 50 day EMA. And I wouldn't necessarily think that's a selling opportunity. I just think it's likely to be a situation where buyers will come in and buy the dip.

Technical Analysis

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The 50 day EMA has been a major influence on the market since the beginning of the year. It's pretty much offered itself as a trend line. So, we'll see if that holds. Even if it doesn't, there's plenty of support down at the $3,200 level as the $3,200 level is a large round psychologically significant figure and an area that I think has proven itself already.

The 200 day EMA is all the way down at the $3,000 region. And I think you need to break that to start selling. I know it sounds like a lot, but really at this point in time, when you look at the last couple of years, we've just been straight up in the air. It makes a lot of sense to go sideways for a while. The Federal Reserve is likely to cut interest rates sooner or later, and the market has that priced in.

EURUSD Chart by TradingView

So, if the Fed decides not to, that could be the wild card to send gold lower over the longer term, but I wouldn't hold my breath for that. As things stand right now, I think you've got a situation where you're buying the dip in a fairly tight range, especially as it's summer.

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