{x} | Trading.live

Fundamentals

During the Asian session on Friday (June 16), spot gold fluctuated in a narrow range, currently trading around 1958, temporarily holding the important stance above 1950. Last night's release of the US retail sales and manufacturing index for May, both beat expectations. However, initial and renewed claims continued to show an upward trend, rising by 262,000 and 1,775,000 respectively. The market seems to be more concerned about employment, as US Treasury yields slide after the data release and the US dollar index fell sharply as well, which also left gold prices for a breath. After falling below 1932, XAUUSD quickly rebounded to regain two important thresholds of 1940 and 1950, but have not effectively fallen below or risen above the poles of the oscillation box. Investors still have to trade in a fluctuating pattern. It should focus on whether 1950 can stand today, as well as the upward resistance of 1970. Traders are able to buy low and sell high in this range.

News for fundamentals remains critical today. traders should pay attention to the monetary policy press conference of the Bank of Japan at 14:30. The final Eurozone CPI annual rate for May, which will be published at 17:00, is expected to be 6.1%. Later, attention should be paid to the US inflation rate expectation for June at 22:00 and the preliminary consumer confidence index of the University of Michigan in June.

Technical Analysis

Trading at the daily timeframe, gold fluctuated and fell yesterday due to the hawkish tone of the Fed's interest rate decision, and the market briefly retraced around 1925 before the evening. Meanwhile, the European Central Bank's hawkish interest rate hike led to the dollar’s slump, and gold also benefited from the rise. The peak of the price once hit the 1960 line, rendering the daily chart to close a white body with a long lower shadow and regain important support at 1940 and 1950.

We highlighted yesterday that although the gold price has fallen to 1932, a quickly recover of 1940 is able to remain the effective operation box from 1940 to 1970 unchanged. Since bulls and bears have not shifted yet,  gold still has to keep the original method of trading in the near future. Technically, gold prices will face much pressure, including the upper short-term of 1965, the previous second peak of 1970-73, and further at 1985. Of course, the support below has been repeatedly verified, which is highly determined, with initial support at 1940 and 1950 and the further strong one at 1932 and 1918.

It is still not recommended for traders to chase long but try a rebound short strategy during the day. Intraday topside technical points focus on oscillations around 1960. If this resistance is successfully broken under the action of fundamentals, the upper side can focus on the scrambling in the 1970-1973 area, while the lower side could keep an eye on the fluctuation in the 1950-1955 area. The important support should still focus on the 1940 line at the bottom of the box. If the market retraces below this level, gold prices will return to a weak downtrend. Aggressive traders could try to take short positions in 1960-1965 with a stop loss at 1970. The first target to take profit is 1950, and the remaining positions can be paid attention to the 1940-1945 area for taking profit under the condition of breaking even.

Trading Recommendations

Trading Direction: Short

Entry Price: 1965

Target Price: 1945

Stop Loss: 1975

Support: 1950.000/1932.000

Resistance: 1970.000/1985.000