Fundamental Analysis

• President Trump stated he has no intention of dismissing the Federal Reserve Chairman.
• Treasury Secretary Bessent commented that the U.S.-China tensions are expected to ease.

XAUUSD Technical Analysis

Analyzing the daily chart of gold: gold reached 3,500USD, but then formed a large upper shadow and pulled back. A bearish candlestick, which marked a new high and closed lower, appeared. In addition, an engulfing pattern at the peak level has formed and broken below the conversion line (Tenkan-sen).

From a fundamental perspective, President Trump’s comment that he does not intend to remove the Fed Chair, along with optimistic remarks from the Treasury Secretary, were well received. U.S. stock markets and the USD Index saw a significant rebound. Given that gold was in overbought territory, the drop was likely driven by profit-taking.

Short-term downside targets include 3,280USD, which corresponds to the 23.6% Fibonacci retracement level, and 3,230USD, the base line (Kijun-sen).

Day trading strategy (1 hour)

On the 1-hour chart, gold has opened with a significant gap down. It is currently trading below the base line, conversion line, and the 26-period moving average, indicating a bearish short-term outlook. For day trading, selling on rallies is preferred.

Sell on a pullback near the 1-hour conversion line at 3,380USD. Place a stop if gold clearly breaks above the base line at 3,415USD. Set the profit target at 3,290USD.

Support/Resistance lines

Key support and resistance lines to consider:

• 3,290USD – Daily Fibonacci level

Market Sentiment

XAUUSD: Sell: 57% / Buy: 43%

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.