XAU/USD: at a key support level

 
 
 
 
 
 
 

According to the minutes of the June FOMC meeting released on Wednesday, the Fed will raise rates by 50 or 75 basis points in July: high inflation justifies "restrictive" interest rates, with the possibility of a "more restrictive stance", if inflation stay at high levels.

In this regard, market participants will carefully study today's weekly report of the US Department of Labor with data on the number of applications for unemployment benefits and the monthly report on the US labor market for June, which will be published at 12:30 (GMT), today and tomorrow.

Jobless claims are expected to remain at pre-pandemic lows (230,000 new claims), new non-farm payrolls were 270,000 in June, and the unemployment rate remained at 3.6%, as did in May, April and March.

In addition, today market participants will pay attention to the speeches of Fed representatives James Bullard and Christopher Waller (at 17:00 GMT), hoping to receive confirmation from their side of the Fed's commitment to further tightening of monetary policy, despite the growing risks of a recession in the economy.

XAU/USD D Chart

XAU/USD broke through yesterday the important long-term support level 1746.00 (EMA144 on the weekly chart), and today it is traded in a narrow range, at the time of publication of this article - near the mark of 1741.00.

If the decline continues, then the breakdown of the support level 1668.00 (EMA50 on the monthly chart) will increase the risks of breaking the long-term bullish trend of XAU/USD.

XAU/USD W Chart

In an alternative scenario, there will be a rebound from the support level 1746.00, and an upward correction of XAU/USD will begin from the current levels with the prospect of growth to the “balance line” we identified earlier, passing through the mark of 1800.00.

Support levels: 1746.00, 1733.00, 1700.00, 1687.00, 1682.00, 1668.00

Resistance levels: 1785.00, 1795.00, 1800.00, 1828.00, 1832.00, 1847.00, 1875.00

XAU/USD Mn Chart

Trading recommendations

Sell Stop 1731.00. Stop Loss 1751.00. Take-Profit 1700.00, 1687.00, 1682.00, 1668.00

Buy Stop 1751.00. Stop Loss 1731.00. Take-Profit 1785.00, 1795.00, 1800.00, 1828.00, 1832.00, 1847.00