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Weekly Market Insight - Chart of the week

EUR/USD

  • Resistance Zone: 121.30 to 121.40
  • Key Resistance: 120.50
  • Support Zone: 119.15 to 119.05
  • Key Support: 119.84
  • Pivot: 119.84

Trade Insights
Viable Long positions above 119.84 with the target of 120.50. Alternatively, Short Sell below 119.80 towards 119.15 to 119.05 and then re-enter for the long position with the same target of 120.50.

EUR/USD

Chart Analysis:

Directional bias: 2 Weeks EUR/USD
As we expected and showed in our previous chart on 28th May the Bearish EUR/USD reversal played out along with the negative RSI divergence. The previous support has turned to resistance now and we see the Key resistance point @ 120.50. Also, the chart shows that the Pivot is where the chart is currently looming i.e.- 119.84. We see possible long trades above this mark with the target of 120.50 as the first resistance. If this is broken strongly then Euro can rise to test the next resistance zone of 121.30. However, we see that any reversal from 120.50 could break the support at 119.84 temporarily to recover again. Alternate scenario is that if 119.84 is broken again this support will become resistance and Short trade possibilities could open with the target of 119.15 to 119.05. Further weakness in the EUR/USD prices could lead to test the next support at $118.20.

Fundamental summary
The EUR/USD pair declined significantly as the US dollar rallied after the FOMC meeting. The Dollar has been rising due to the higher 10-year US yields. As Fed reserve sees higher inflation ahead the first round of rate hike is projected to happen in 2023.

XAU/USD

  • Resistance Zone: $1845 to $1850
  • Key Resistance Level: $1825
  • Support Zone: $1768 to $1775
  • Initial Support: $1800
  • Pivot: $1820

Trade Insights 
Viable Long positions above $1820 with the target of $1830. If $1830 is broken too, then another long trade to the next resistance of $1845. Alternatively, if Gold drops below $1820 the Viable Short positions to $1800. If the sell-out continues then the next support is at $1770. Stoch RSI has fallen below the oversold level and could recover from this bottom.

GOLD CHART

Chart Analysis:

Directional bias: 2 Week GOLD/USD
Gold lost considerable ground as it touched on $1845 level on 14th June and then tumbled further down to $1804 on 16th June as Fed kept the interest rate unchanged near zero but indicated rate hikes could come as soon as 2023. We saw recovery as it hit back at $1825 and is struggling to breakthrough this level. As we move forward, the chart shows that the Gold could recover if it stays above the Pivot of $1820. A possible Long Trade at this stage to hit the first target of $1830. Once $1830 is broken and after consolidation the Gold can test the resistance zone at $1845 to $1950. Gold is away from the psychological mark of $1900 and the IG Client Sentiment shows that Net Long positions on Gold are at 81%. If the Gold moves below the $1820, possible short positions could be viable to first test support at $1800 mark and then next support at $1770.

Fundamental summary
The headwind Gold is facing currently is better yielding returns on Global Equity Markets. In addition to that Fed left Interest rates unchanged and would continue their asset purchases of $120 billion per month. However, the change in the timeline to raise interest rates caused yesterday’s gold freefall. The Headwinds Gold prices are facing as of now are higher yields in U.S debt instruments, a strong US. Dollar, and revised timelines of interest rate hike. There is less interest in Gold is also pushing the prices down. It is to be seen if the Gold will recover or stay behind along with the stronger sessions in Equity markets. As we move into next stages of US economic recovery with tightening of the interest rates by 2023 the USD could become stronger weakening the gold prices.

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Disclaimer

The information provided is of a general nature and is not intended to be personalised financial advice. The information provided is not intended to be a substitute for professional advice. You may seek appropriate personalised financial advice from a qualified professional to suit your individual circumstances.

Trading in Rockfort Markets derivative products may not be suitable for everyone as derivative products may be considered as high risk. Please ensure that you understand the risks involved. A Product Disclosure Statement can be obtained here and should be considered before trading with us.
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