Gold Reverses as US Officials Speak【May 22, 2024】

May 22, 2024

Markets Analysis

Fundamental Analysis

  • Waller, Fed Governor, states observing needed for several more months
  • Fed Vice Chairman emphasizes necessity to hold rates longer than expected
  • Nvidia’s earnings announcement expected; leading the AI boom, market watchful

XAUUSD technical analysis

Analyze the daily chart of gold. Use Fibonacci arcs and Fibonacci channels to examine the market. Despite falling to the 28-day moving average, it rebounded and rose to around 2450USD. Although it declined yesterday due to adjustments, the 100% price range of the arc is acting as a support line.

A characteristic of the arc is that it is curved, not straight. The price range centered around 2400USD is likely to be the support zone in the future. There is a possibility of a rebound around 2402USD, where the arc and channel overlap.

Inflation is calming down in developed countries, and each country is preparing for rate cuts. Although the US maintains a wait-and-see stance, the market is likely to remain sensitive to corporate earnings trends and official statements.


Day trading strategy (1 hour)

Analyze the 1-hour chart of gold. The Fibonacci channel is being noted, and there is strong resistance between 2430USD and 2440USD. Although the lows are gradually rising, the market lacks upward momentum. The appearance of a large bearish candlestick near the high suggests that adjustment declines and a wait-and-see stance may continue.

If it breaks below 2417USD, it could plummet to around 2405USD, so caution is necessary. At 2395USD, there is a 61.8% Fibonacci retracement, so if it falls to this level, a rebound is likely.

The day trading policy is to buy on deep dips. Long-term, there is no change in the US rate cut policy, so gold is expected to rise. Enter buying in the early 2400USD range, close around 2430USD, and stop if it clearly breaks below 2395USD.

Support/Resistance lines

The support and resistance lines to consider in the future are as follows:

  • 2450USD: Weekly Resistance Line
  • 2420USD: Monthly Support Line
  • 2405USD: Monthly Support Line

Market Sentiment

XAUUSD: Sell: 57%, Buy: 43%

Featured Currency Pair of the Week (CHFJPY)

Swiss Franc Yen is slightly declining. It forms a harami pattern with an upper shadow. The upward momentum is calming, and a bearish engulfing pattern of “bullish candlestick + large bearish candlestick” is forming near the recent high. Caution against downside risks is warranted. Watch if it falls below 171JPY. If it breaks below 171JPY, it may drop to the early 170JPY range.

Today’s important economic indicators

Economic indicators and eventsJapan time
NZ Policy Rate Announcement (Expected: Rate Hold)11:00
UK Consumer Price Index (Expected: YoY 2.1%)15:00
US Existing Home Sales23:00
US Crude Oil Inventory23:30
US FOMC Minutes3:00 (next day)

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

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