Markets Analysis

Fundamental Analysis

• The Japan-US-Korea finance ministers’ meeting was held, sharing concerns over the USD appreciation affecting Japan and Korea
• The foreign exchange market saw widespread USD weakness following remarks aimed at curbing USD strength
• Gold fell to around 2360USD but saw buying at lower prices as a safe-haven asset

XAUUSD technical analysis

Analyzing the daily chart of gold, it can be seen that it has hit the upper limit of the parallel channel based on key highs and lows. Recently, unilateral progress in USD appreciation has been noted, with emerging countries expressing concerns.

Should there be coordinated intervention by various countries, a significant adjustment could occur. Technically, the RSI has dipped below 70 to 68, commonly considered a sell signal.

The daily scenario suggests a potential correction to the 2310USD level, corresponding to the 100% Fibonacci expansion.

Day trading strategy (1 hour)

The 1-hour gold chart shows three major peaks, with the middle peak being the highest and the side peaks nearly at the same price level, forming a ‘Head and Shoulders’ pattern.

The pattern is not yet complete, but a fall to the neckline around 2320USD and a breakout below could lead to a further decline.
The impact of USD appreciation curbing and how countries coordinate their response will be crucial going forward. The market might see continued adjustments. A rebound is quite possible near the neckline.

At this stage, strategies include a market sell anticipating a fall to the neckline or a buy limit order anticipating a rebound at the neckline. The 240 moving average is at 2345USD, suggesting a potential drop to this level.

The day trading strategy is to sell on a breakout below 2360USD, settling at 2345USD, and placing a stop at 2370USD.

Support/Resistance lines

The following are key levels to consider:

2310USD – Fibonacci Expansion 100%

Market Sentiment

XAUUSD Sell: 53% Buy: 47%

Featured Currency Pair of the Week (AUDJPY)

The AUDJPY is moving around the 28-day moving average. Today, Australian employment statistics are scheduled to be released, likely increasing volatility. As the USD leads the forex market, the direction for the cross yen pair AUDJPY is hard to discern.

The strategy is to scalp for small, consistent profits. The outcome of the Australian employment statistics will be critical in determining the direction of Australian interest rate policies.

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.