Since the end of May 2024, the Gold (XAUUSD) 2H chart has been respecting the EMA 200. Additionally, everytime the RSI dipped into the <30 territory, or rose into a >80 RSI reading, we saw a significant bounce or rejection.
This recent behavior on Gold presents a range trading opportunity, which will see Gold oscillate between the price zones of $2,288.85, and $2,377.44.
Technical Factors and Areas to Watch
As stated, the 200 Exponential Moving Average on the 2-hour has been recently well respected by the markets. Coupled with this is the Point of Control formed since April of 2024, when Gold pumped to new highs and shocked the markets.
With this in mind, here are the areas to watch for range trading opportunities on Gold 2H:
| Potential Short Zone: EMA 200 and Point of Control Resistance at $2,332 – $2,334 |
| Potential Long Zone: Potential RSI<30 Region, Support Zone at $2,288.85 |
We may lose the short opportunity at $2,332 if the price falls first before testing the EMA 200. Afterwhich, the price may just bounce and test the range highs at ~$2,377.
However, I am personally looking towards the short scenario as there are fundamental factors in the market that support the idea of a price decline.
Fundamental Factors: DXY on the Rise
With multiple economic factors empowering the US Dollar right now, bearish pressure may be exerted on Gold until the DXY hits a potential resistance at 106.51.
The upcoming CB Consumer Confidence announcement, tomorrow, on June 25th may complicate matters a bit if the readings come in lower than forecasted.
A lower reading would imply that U.S consumers are feeling economic pressures more than expected and giving the Federal Reserve a reason to consider rate cuts.
However, a higher reading would suggest that the U.S economy is doing well, aligning with last week’s Flash PMI Data, and exerting more pressure on the Federal Reserve to hold rates (or even raise them).
