Fundamental Analysis

• The left unexpectedly won the French election, raising concerns about increased fiscal spending, which might lead to selling of the Euro.
• The U.S. employment report showed a rise in the unemployment rate, with the number of new hires being revised downward.

XAUUSD technical analysis

Analyzing the daily chart of gold, it is highly likely that it is currently forming the third peak (shoulder) of a head-and-shoulders pattern. From a fundamental perspective, with growing expectations of a rate cut in the U.S., there is strong buying pressure in the gold market.

Looking closely at the price trend, there have been three rebounds near the neckline at around 2280 USD, making this level an important support. The upper target is the high of the first peak at 2431 USD. Furthermore, if it breaks the recent high of 2450 USD, the psychological milestone of 2500 USD will come into view.

The most crucial factor in forecasting future developments is the outlook for U.S. interest rate policy. It is necessary to closely monitor the movement of gold prices while focusing on this point. If rate cut expectations increase, there is a high possibility that upward pressure on gold prices will strengthen further.

Day trading strategy (1 hour)

Analyze the 1-hour chart of gold. After the release of the U.S. employment report, gold surged. With increasing expectations of a U.S. rate cut, it has risen to just before 2400 USD. As the rate cut mood intensifies, a continued steady rise is expected.

The day trading policy is to buy. Consider a buy entry around 2370 USD. The target for settlement is around 2431 USD, with a stop at 2365 USD.

Support/Resistance lines

The following support and resistance lines should be considered going forward.

2431 USD .. Previous high

2450 USD .. All-time high

Market Sentiment

XAUUSD　Sell: 63%　Buy: 37%

Featured Currency Pair of the Week (AUDJPY)

The Australian dollar continues to rise. Since the end of June, it has been steadily increasing, forming a strong upward trend. After surpassing the 100 yen milestone, it is in a sky-high state. The upper target price is around 109 yen. Traders who see it as overbought may initiate selling. Wait for a buying opportunity on the dip.

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.