Gold on an upward trend, anticipating a peak out in U.S. interest rates?【July 19, 2023】

Fundamental Analysis

• U.S. Stock Indexes Rebound, Broader Buying Orders for AI-Related Stocks
• Gold rises; lower 10-year US Treasury yields put upward pressure on gold
• 0.25% rate hike factored into next week’s U.S. FOMC meeting; focus on whether a rate hike is likely after August

XAUUSD Technical Analysis

Analyze the daily chart of Gold. Drawing a Fibonacci retracement on the major recent uptrend, we can see that it reacted at 38.2%. It rebounded at 61.8% (USD 1903) and recovered to 38.2% (USD 1978). This USD 1978 corresponds to the lower end of the past range, which may lead to a certain amount of profit taking and new sell orders.

Confirming market sentiment, 78% of the positions are sell positions, indicating a considerable degree of selling pressure. The possibility of a breakout involving stop losses cannot be ruled out.

Day Trading Strategy (Hourly)

The day-trade policy is to buy on the push side; checking the hourly chart, the support band is at 38.2%. Although the price fell back at the +3σ of the Bollinger band, we believe that this is a temporary profit-taking move and that the price is likely to rise higher again.

Specifically, we would like to buy at around USD 1970, the median line of the Bollinger Band. However, if the RSI is below 50, we plan to wait until it exceeds 50. If the price falls clearly below the median line and the median line turns into a resistance line, we will stop. Profit taking is expected near USD 1996 in the medium to long term and near USD 1980 in the short term.

Support and Resistance Lines

The resistance line to be considered in the future is as follows

1981 USD – Major resistance line
1970 USD – The middle line of the Bollinger Band

Market Sentiment

XAUUSD　Sell: 78% Buy: 22%

Today’s Important Economic Indicators

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