Current trend

Over the past six weeks, the XAU/USD pair has been making attempts to decline and is now holding in the area of 2328.94: the uncertainty of further monetary policy in the United States exerts pressure on the quotes of precious metals.

At the moment, most experts believe that the American regulator will begin adjusting the cost of borrowing in the fall, but there is still a possibility of a complete rejection of interest rate cuts this year. Despite the May slowdown in the consumer price index from 3.4% to 3.3% and the basic price index of private consumption expenditures from 2.8% to 2.6%, the members of the US Federal Reserve are cautious in their rhetoric. Most of them note that it is necessary to wait for even more evidence of a decrease in inflationary pressure to appear and even allow a return to the "hawkish" rate in case the indicator stabilizes above the 2.0% target. In this regard, it is worth noting the comments of the President of the Richmond Federal Reserve Bank (FRB), Thomas Barkin, who said that the economy turned out to be stronger than predicted (demand remains stable, and service providers still have the opportunity to raise prices), therefore, a long-term continuation of the current tight monetary policy looks more appropriate.

Perhaps the mood within the regulator will change after the publication of June data from the labor market on Friday: if employment growth slows down again and unemployment rises, this will become an additional argument for the transition to monetary easing.

Support and resistance

Technically, the price chart has signs of forming a "pennant" figure towards a long-term uptrend. If the 2375.00 mark (Murrey level [4/8]) is broken up, the quotes will pass through its upper limit and will be able to continue moving towards the targets of 2437.50 (Murrey level [6/8]) and 2500.00 (Murrey level [8/8]). The key for the "bears" is the level of 2281.25 (Murrey level [1/8]), the breakdown of which will become a catalyst for downward dynamics to the area of 2250.00 (Murrey level [0/8]) and 2187.50 (Murray level [-2/8]).

Technical indicators do not give a clear signal: Bollinger Bands are horizontal, MACD is at the zero line, its volumes are insignificant, and Stochastic is directed up.

Resistance levels: 2375.00, 2437.50, 2500.00.

Support levels: 2281.25, 2250.00, 2187.50.

Trading tips

Long positions can be opened above the 2375.00 mark with targets of 2437.50, 2500.00 and stop-loss of 2327.00. Implementation period: 5–7 days.

Short positions should be opened below the level of 2281.25 with targets of 2250.00, 2187.50 and stop-loss of 2302.00.