Markets Analysis

Fundamental Analysis

• The situation in the Middle East remains unstable; Hamas accepts ceasefire proposal, but Israel is not convinced
• Selling of the USD is dominant, except against the yen and the Swiss franc
• There are few key economic indicators this week, market awaits next week’s US CPI

XAUUSD technical analysis

Analysis of the daily gold chart indicates the Middle East situation has reached a critical juncture. There have been reports of Hamas agreeing to a ceasefire, but Israel’s dissatisfaction complicates matters. The US has halted weapon exports to Israel, and other countries are hardening their stance against Israel.

The Fibonacci retracement is noticeable on the daily chart, with the 23.6% level acting as a resistance line. Whether gold returns to an upward trend depends on breaking the recent high of 2253 USD.

RSI has not fallen below 50 and shows signs of rebounding. Caution regarding the Middle East situation is advised.

Day trading strategy (1 hour)

Analysis of the 1-hour gold chart shows that after reaching a low of 2277 USD, it has smoothly broken above the 28 and 240 moving averages. It’s updating recent highs and has an upward trend. It is currently trading around 2325 USD, with potential to target 2400 USD again.

The Ichimoku conversion line is acting as a support line, and further rises are expected.

Day trading strategy would be to buy on dips or at market prices. Entry strategy is to buy around 2320 USD, take profits around 2340 USD. Stop should be set if it falls below 2320 USD.

Support/Resistance lines

Key support and resistance lines to consider:

2325 USD – Fibonacci retracement

Market Sentiment

XAUUSD Sell: 58% Buy: 42%

Featured Currency Pair of the Week (EURAUD)

Today, the Reserve Bank of Australia’s policy decision meeting takes place. Market expectations are for it to remain unchanged, but comments from the central bank’s governor will be important. If hints of a rate cut are suggested, the Australian dollar might be prone to selling.

EURAUD is trading around 1.6240 AUD, and the risk of a drop is considered for today. The 1.62 AUD level is a strong support zone, so profit-taking should be done frequently.

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.