Markets Analysis

Fundamental Analysis

• Gold rose to 2222 USD, marking an all-time high.
• Chairman Powell of the Federal Reserve maintains the forecast of three rate cuts within 2024.
• The USDJPY rose to 151.85 JPY but then fell to the lower 151 JPY.

XAUUSD Technical Analysis

A daily and fundamental analysis of gold is conducted. In the dot plot released early today, Chairman Powell maintained the forecast for three rate cuts within 2024. The policy interest rate has been held for five meetings in a row, and while the strong dollar due to high interest rates continues, gold saw a concentrated flow of buy orders.

Given there was discussion about changing the forecast from three to two rate cuts, maintaining the number of rate cuts was a dovish move, and gold bulls rushed to place buy orders. The price surged from 2158 USD to 2200 USD, triggering stop losses.

Analyzing the RSI, which is recoiling at 70, indicates some overheating. Historically, after reaching new all-time highs, a sharp decline tends to follow. This time is no different, with gold hitting the significant mark of 2222 USD. Caution against a sharp decline is advised.

Day Trading Strategy (1-Hour Chart)

An analysis of the 1-hour chart of gold shows the RSI at 73, indicating overheating and a price decline due to profit-taking sell orders. After updating its all-time high, the price seems to be taking a breather. In such a market, it is advised not to chase aggressively. Instead, considering the extremely high price range, it might be worth considering initiating a sell.

After major events, a slight sell-off of the dollar could occur due to profit-taking. Additionally, Chairman Powell’s decision to maintain the rate cut forecast could also be a factor driving the dollar sell-off.

Today’s day trading strategy involves selling above 2210 USD and buying around 2186 USD. Important daily and 1-hour support lines exist between 2184 USD and 2188 USD. It is worth watching for a bounce at these levels.

Support and Resistance Lines

The following are the support and resistance lines to consider:

2188 USD – 1-hour Ichimoku cloud conversion line

2186 USD – 1-hour Ichimoku cloud baseline

2184 USD – Daily Ichimoku cloud conversion line

Market Sentiment

XAUUSD Sell: 67% Buy: 33%

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.