Markets Analysis

Fundamental Analysis

• Waiting for the US Core PCE Price Index, CPI announcements from European countries also expected this week
• June rate cut by ECB anticipated, could be bullish for gold
• Rate cut timing could become clearer with CPI data from the US and Europe, potentially lifting gold

XAUUSD Technical Analysis

Considering gold’s daily charts and fundamentals. It has broken below the Ichimoku Cloud’s conversion line, indicating a consolidation phase. Specifically, it is forming a range between 2150USD and 2200USD, searching for direction.

The conversion line tends to act as support/resistance during strong trends, and currently being below it suggests at least a pause in momentum.

Gold could find bullish factors with this week’s PCE Price Index and CPI announcements from the US and Europe, clarifying the timing of rate cuts by the Fed and ECB. If gold’s daily close surpasses the conversion line again at 2184USD, testing 2200USD could be possible. Conversely, falling below the support line at 2145USD could lead to a deeper correction, with a potential drop to around the baseline at 2125USD.

Day Trading Strategy (1-Hour Chart)

Analyzing gold’s 1-hour chart. A thick cloud above suggests a heavy upside, with a narrow range indicating indecisiveness. It has rebounded off the 52 moving average, with previous rebounds off the 240 moving average as well.

A key level to watch might be 2166USD. Material is needed to break below where the 200 moving average and a major support line converge. If it dips below 2166USD, the next support line is at 2161USD on the 240 moving average. Falling below 2160USD could lead to 2155USD.

The day trading strategy favors buying dips. Placing a buy limit around 2160USD, with a stop at 2155USD and a target at 2166USD. Due to sluggish movement, if the limit order doesn’t execute, the plan is to hold off on trading.

Support and Resistance Lines

Key support and resistance lines to consider are as follows:

2270USD – 100% Fibonacci level on the weekly chart

2166USD – A major support line

2095USD – Fibonacci level on the weekly chart

Market Sentiment

XAUUSD Sell: 62% Buy: 38%

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*Trading advice in this article is not provided by Milton Markets, but by Shu Fujiyasu Jr., a certified technical analyst.