Chapter 46  XAUUSD: Eyes on Tonight's Meeting, Oscillations May Expand (7.26)


In Wednesday's (July 26th) Asian session, spot gold rebounded rapidly from lows, and it is currently trading near 1969. Approaching the announcement of the Fed interest rate resolution, the market generally shifts the strategy to wait-and-see, resulting in slight oscillations in the short-term gold price. However, the market still expects that the interest rate hike to be raised this week is the last interest rate hike in 2023, and the gold price is still resistant to falling. In addition, investors need to pay close attention to the overnight Fed meeting, which will mention the monetary policy.

Data: U.S. July Conference Board Consumer Confidence Index was 117, a record high since July 2021. The expected number was 111.8, and the previous number was revised from 109.7 to 110.1. Meanwhile, U.S. May FHFA house price index rose 2.8% YoY and 0.7% MoM (expected to rise 0.6%), and the previous value rose 3.1% YoY and 0.7 MoM. In addition, the U.S. May S&P CoreLogic Case-Shiller 20-City Composite Home Price NSA Index fell 1.7% YoY, with the expectation of falling 2.2% and the previous value fell 1.7%. Besides, IMF released the July "World Economic Outlook" and renew this year's expected economic growth rate from 0.2% to 3%. Instead, next year's economic growth rate expectations remain unchanged.

Today's focus: The Fed will announce the interest rate resolution at 2:00 am Beijing time on Thursday (July 27th). More than this, investors need to focus on Fed Chairman Powell's press conference at 2:30 am.

Technical Analysis

Daily chart: There was a surge during the morning session, in which the gold tested 1965 and consolidated under pressure. Furthermore, gold retraced twice in the European and the U.S. sessions, once dropped to the expected support between 1952-1950 and rebounded, closing the day positively near the 5-day and 10-day SMA (1965).  Technically, the SMAs are mixed, MACD forms a golden cross and KDJ forms a death cross, suggesting an oscillating pattern shortly. Since previously, gold was suppressed and declined after touching the 2-month high, the 5-day SMA may cross below the 10-day SMA. Before gold climbs above last Friday's high (1974), it tends to deprecate with oscillations. Considering the daily chart and the hourly chart, it is recommended to focus on the oscillation between 1968-1970, and the key pressure level will be in 1974. If the support below is lifted, investors can move the target to the oscillations near 1955, but the technical support remains in 1945-1940.

Trading recommendations: Buy lows and sell highs by considering the bigger range between 1950-1970 and the smaller range between 1945-1974.

XAUUSD: Eyes on Tonight's Meeting, Oscillations May Expand (7.26)-Pic no.1

Trading Recommendations

Trading direction: short

Entry price: 1974

Target price: 1955

Stop loss: 1978

Support: 1950.000/1945.000

Resistance: 1974.000/1983.000

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