Gold has stabilised just above the 50-day moving average on Wednesday, despite the greenback continuing the previous day's rally that saw the yellow metal falling to a near one-month low.
The metal rose to as high as $1300 from Tuesday's close of $1293.76. It had weakened over 3.5% in just two days to Tuesday's low of $1291.
The Dollar Impact
The USD index, the gauge that measure the greenback's strength versus the currencies of the six largest trading partners of the US, rose to a one-month high of 80.39 on Wednesday, up 0.2% from Tuesday's close.
The Fed Chair Janet Yellen had balanced her remarks in the semiannual testimony in front of the Senate's banking committee on Tuesday, but that she didn't want to be particularly dovish was taken as hawkish by the markets, or so showed the dollar rally afterwards.
The market will remain focused on Yellen, who is continuing her testifying in front of the US lawmakers on Wednesday, in addition to the Fed's Beige Book, due later in the day.
Weekly jobless data and Philadelphia Fed's manufacturing survey for June due on Thursday will be the next numbers from the US ahead of the July Reuters/Michigan confidence index and the June Conference Board leading index scheduled for Friday.
What Charts Say
A technical study focused on the "flag pattern" formed on the gold chart had seen a sharp break on the higher side, which now seems unlikely.
However, the metal looks keeping its upward trajectory and has just touched the downside limit of an upward channel with the fall since Monday.
On the downside, $1277 seems to be the next support line which falls on the 23.6% Fibonacci retracement of the March-June selloff.
As long as the current support of $1300 holds, the metal has its upside risks live, and after a weak resistance level of $1308, it will target $1315, on the higher side.
Then comes the $1331-33 resistance area ahead of a retest of the four-month high of $1345 touched on 10 July.
A break of $1315 will increase risks of a continuation of the upward trend since June and the second wave may find channel resistance above $1360.