Gold Breaks Out of Range, Focus on U.S. Employment Report【June 7, 2024】

June 07, 2024

Markets Analysis

Fundamental Analysis

  • U.S. Unemployment Insurance Claims Exceed Market Expectations
  • Bank of Japan Governor Acknowledges 2% Inflation Target is Still Distant, Supports Reduction in Government Bond Purchases
  • ECB Decides on a 0.25% Rate Cut, Does Not Indicate Path for Additional Cuts

XAUUSD technical analysis

Analyzing the daily chart of gold. It has broken above the 28-day moving average and the range high. It has risen to the 2370 USD level for the first time in a while. U.S. unemployment insurance claims exceeded expectations, indicating a loosening of the U.S. labor market. There is a possibility of a slight decrease in inflationary pressures. Financial officials and analysts expect two rate cuts within the year.

There may be a possibility of forming a head and shoulders pattern. If it is currently forming the third peak, the 2400 USD level might be the ceiling, and it will be important to see if it declines again. If it clearly surpasses the recent high of 2450 USD, it might aim for 2500 USD.

The direction is likely to be determined by the U.S. employment report.


Day trading strategy (1 hour)

Analyzing the 1-hour chart of gold. It has been in a range, but it has broken out. The range high has turned into a support line, which is one of the signs of an upward trend. The benchmarks are expected to be 2400 USD and 2410 USD. Today, the U.S. employment report is scheduled, and the direction will likely be decided after its release.

The prospect of a rate cut due to a weakening U.S. economy relatively increases the buying pressure on gold. It will be important to see if it surpasses 2400 USD.

The day trading policy is generally a buy perspective, but caution is needed regarding holding positions until the employment report is released.

Support/Resistance lines

The following support and resistance lines should be considered:

  • 2410 USD … Previous pivotal price

Market Sentiment

XAUUSD Sell: 58%, Buy: 42%

Featured Currency Pair of the Week (NZDCAD)

The New Zealand Dollar/Canadian Dollar is slightly overbought. At the time of writing, there is significant selling due to profit-taking and excessive rises. After the significant event of Canada’s rate cut, there is a slight lack of material. There will likely be increased selling at the 0.85 CAD round number. Today, the U.S. employment report will be released, so caution is needed for trading.

Today’s important economic indicators

Economic indicators and eventsJapan time
EU Gross Domestic Product18:00
U.S. Employment Report (Expected: Increase of 185,000)21:30
Canadian Employment Report21:30

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

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