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Analysis and Education>Technical Analysis: XAUUSD

Technical Analysis: XAUUSD

06.02.2024

XAUUSD fell to a one-week low


On Monday, as the USDX and the US treasury yield climbed, XAUUSD broke below US$2020 per ounce. It broke below the mark for the first time since 29th January. It ended down 0.73% at US$2024.89 per ounce.


Powell expected that the Fed will not cut the interest rate in March


The Fed will be cautious about when the interest rate will be cut, and it is less likely to reduce the interest rate in March, the Fed Governor Powell said on Monday. As the inflation cooled down at a steady pace, officials at the Fed generally agree that it is appropriate to cut the interest rate this year and the interest rate may be reduced for three times this year, Powell added.


Strong economic data boosted the US dollar


On Monday, boosted by strong economic data, the USDX climbed further and revised the highest level since mid-November 2023. It reached the highest of 104.6. It ended up 0.49% at 104.47. US ISM Non-Manufacturing PMI (January) increased from 50.5 to a 4-month high of 53.4 Vs. 52 (forecast), according to the data from the ISM.


The bearish market trend prevailed in the short term


the Chart of the Day


On the chart of the day, XAUUSD continued falling. The bearish market trend prevailed in the short term. In terms of technical indicators, KDJ went downwards after death cross occurred, showing XAUUSD will fall further. XAUUSD will decline further with potential support at 1973 if it breaks below the support at 2002.


4-hour chart


On the 4-hour chart, XAUUSD was prone to fluctuation and declined. The bearish market trend prevailed in the short term. In terms of technical indicators, MACD went downwards after death cross occurred, showing the market trend is bearish. XAUUSD will fall further if it rebounds but is capped at 2024.


Key resistance: 2040, 2052

Key support: 2002, 1973

 

Generally speaking, as US economic data was strong, and the expectation that the Fed will cut the interest rate reduced, XAUUSD is more likely to fall further in the short term. Investors should focus on speeches made by officials at the Fed during the day.

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