Markets Analysis

Fundamental Analysis

• The US CPI exceeded expectations, eventually leading to a preference for buying USD.
• The unemployment rate in the UK rose, with a significant decrease in the number of employed.
• Market interest turns to next week’s Bank of Japan meeting, with speculation on the potential for Yen strengthening as negative interest rates are possibly lifted.

XAUUSD Technical Analysis

Analyzing the daily chart of gold, it fell to around 2150 USD, marking a retrace after 9 days. The US CPI outperformed market expectations at 3.2%, not reaching the Federal Reserve’s target range of around 2.0%, indicating a continued strong inflation trend.

Though not sufficient to overturn expectations of rate cuts within the year, the data supported a cautious approach to rate cuts, acting as a selling factor for gold. Breaking below the strong support level of 2160 USD is particularly interesting.

Day Trading Strategy (1-Hour Chart)

Analyzing the 1-hour chart of gold, it had been moving in the 2170 USD range before breaking below the lower limit of its range, leading to an extended decline. The Ichimoku Conversion Line acted as resistance, with gold moving around the 2157 USD level.

The target is near 2145 USD, corresponding to the 23.6% Fibonacci retracement level on the daily chart. A move above the Conversion Line and the Base Line would likely indicate a return to an upward trend. Until then, the approach is to trade with a downward view.

The day trading strategy is to sell. Until 2145 USD, the plan is to sell on rises. If the RSI approaches 30, stop trading and take profits, then adopt a wait-and-see approach.

Support and Resistance Lines

The following are key support and resistance lines to consider:

2160 USD: A major resistance line

Market Sentiment

XAUUSD Sell: 65% Buy: 35%

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.