Fundamental Analysis

• The US GDP exceeded expectations, reducing the anticipation of an early rate cut.
• This has put downward pressure on gold, which is hovering around 2363 USD.
• The USD/JPY pair rebounded from a support line at 151.94 yen and is trading in the upper 153 yen range.

XAUUSD technical analysis

Analyzing the daily chart of gold, it appears that gold is breaking below the 52-day moving average and an ascending trend line. The better-than-expected US GDP and the fading expectations of a US rate cut have led to selling pressure on gold. Below, there is a cloud providing support, and beyond the cloud, there is the 100% line of the Fibonacci expansion. The stochastic indicator suggests that gold is in an oversold condition.

Currently, there is a noticeable decline in US stock indices, but funds are shifting from large-cap to small-cap stocks. The Russell 2000 Index, composed of small and mid-cap stocks, is rising. Gold is awaiting the next week’s FOMC meeting, where the focus will be on whether a rate cut will be decided or postponed until September. A rate cut could lead to an increase in stock prices.

Day trading strategy (1 hour)

Analyzing the 1-hour chart of gold, there has been a sharp decline from around 2424 USD to approximately 2355 USD, breaking below the 61.8% level of the Fibonacci expansion at 2370 USD. There may be profit-taking actions this week due to the significant drop.

Caution is needed around the retracement to 2370 USD. If 2370 USD is confirmed to act as a resistance line, consider entering a sell position on a retracement. Entry at 2370 USD, with a target of 2335 USD, and a stop at 2375 USD.

Support/Resistance lines

Consider the following support and resistance lines:

2335 USD – Fibonacci level

2232 USD – Monthly support line

Market Sentiment

XAUUSD Sell: 53% Buy: 47%

Featured Currency Pair of the Week (USDCHF)

The USD/CHF pair has broken below the significant support line of 0.8819 CHF and is updating its recent lows, currently trading at 0.88 CHF. A continued sell-off is expected, potentially leading to a decline to around 0.8752 CHF.

Yesterday, the US GDP exceeded market expectations, leading to increased buying of the dollar in late New York trading. With the weekend approaching, there is a higher likelihood of position adjustments, so caution is advised.

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.