Fundamental Analysis

• The yield on US 10-year Treasury bonds has risen, pushing US interest rates up to a key level of 4.10%.
• There is speculation about the Federal Reserve holding rates steady, as the latest employment report and inflation figures exceeded expectations.
• USDJPY has reached the mid-149JPY range, with the possibility of testing the 150JPY level.

XAUUSD technical analysis

Analyzing the daily chart of gold, we can see a rebound off the 28-day moving average. Looking at the candlesticks, an engulfing pattern has formed, with gold continuing its upward trend for the second consecutive day.

It’s an unusual situation where US interest rates are rising, while at the same time, stock indices are hitting record highs.
Typically, interest rates and stocks have an inverse relationship; when interest rates rise, the stock market tends to fall, putting selling pressure on gold as well.

Upon checking the monthly and weekly charts of gold, signs of overheating are undeniable, raising caution for a potential pullback. However, due to tensions in the Middle East and the seasonal anomaly, there is strong demand for safe-haven assets, making this a period when buying tends to increase. It’s advisable to be cautious when trading. An upward channel is forming, and there is a possibility of testing the 2,700USD range. The RSI has rebounded at 50, suggesting strong buying interest on dips.

Day trading strategy (1 hour)

Analyzing the 1-hour chart of gold, recent highs have been updated, and the previous decline has been fully recovered. The 200-day moving average is functioning as support, indicating a strong market for buying on dips.

Analyzing the ADX, it is above 30, while the +DI is declining, signaling a challenging market.

The day trading strategy aims to sell in an overbought market. Short positions can be taken around the targets of 2,688USD and 2,701USD. Profit-taking should be near 2,640USD. Set a stop if the price clearly exceeds the upper boundary of the ascending channel.

Support/Resistance lines

Key support and resistance levels to consider in the future are as follows:

• 2,685USD – Recent High
• 2,613USD – Monthly Support Level

Market Sentiment

XAUUSD: Sell: 62% | Buy: 38%

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.