Technical Analysis: XAUUSD

XAUUSD increased by about 1%

On Wednesday, as geopolitical tension escalated, and the expectation that the Fed will cut the interest rate rose, XAUUSD was boosted. It ended up 0.98% at US$3355.13 per ounce.

US inflation failed to meet expectations in May

US CPI, y/y (May) increased from 2.3% to 2.4% Vs. 2.5% (forecast), according to the data from the US Department of Labor. US CPI, m/m (May) fell from 0.2% to 0.1% Vs. 0.3% (forecast).

It is widely expected that the Fed may start reducing the interest rate in September after the inflation is released. Dealers believed that the probability that the Fed will cut the interest rate in September climbed to 70%, according to the CME’s FedWatch.

Tension in the Middle East rose

The US President Trump said recently that he became increasing less confident on imposing new restrictions on Iran’s nuclear plans through negotiation. Meanwhile, Iran’s Minister of Defense Aziz Nasirzadeh warned that America’s military bases in the Middle East will be the target for retaliation if the negotiation fails or Iran is attacked.

Technically speaking, the bullish market trend prevailed in the short term

the Chart of the Day

On the chart of the day, XAUUSD increased steadily. The bullish market trend prevailed in the short term. In terms of technical indicators, KDJ went upwards after golden cross occurred, showing that XAUUSD will rise further. Investors should focus on whether XAUUSD will break through the resistance at 3403. It will jump further with potential resistance at 3430 if it breaks above 3403.

4-hour chart

On the 4-hour chart, XAUUSD was prone to fluctuation and climbed. The bullish market trend prevailed. In terms of technical indicators, MACD went upwards after golden cross occurred, showing that the market trend is bullish. Investors should focus on whether XAUUSD will break through the support at 3349. It will rise further if it retreats but is stable above 3349.

Key resistance: 3403,3430

Key support: 3349,3315

Generally speaking, the bullish market trend prevailed in the short term. Investors should focus on US economic data during the day.