Daily Gold Technical Analysis: Market Expectations After Fed Chair Powell's Speech. Is Another Bull Run in XAUUSD Coming?

Monday's High Impact News Recap

Yesterday, two significant news events were released: the Empire State Manufacturing Index and Fed Chair Powell's speech.

• Empire State Manufacturing Index: The index indicated that the US economy is in a substantial expansion mode.
• Fed Chair Powell's Speech: Powell emphasized that the economy has performed remarkably well over the last couple of years, suggesting a low chance of a hard landing. He highlighted that the three readings in the second quarter add confidence in inflation falling. Now that inflation has decreased, both mandates will be considered.

A crucial point from Powell's speech was: "If we were to see unexpected weakening in the labor market, that would merit a reaction from us." This implies that if there is unexpected weakness in the labor market in the coming weeks, the Fed might consider an earlier rate cut.

Market Sentiment and Future Projections

Based on current market sentiment and the Fed Watch Tool, it seems highly likely that a rate cut will occur in September. This could potentially lead to a bearish trend in the DXY (US Dollar Index).

Upcoming Data Releases

Today, the Core Retail Sales m/m and Retail Sales m/m data will be released, providing a clearer picture of inflation.

Daily Chart Analysis and Key Levels in Gold

Watch the video analysis here : Gold Forecast | 16 July | Market Expectations After Fed Chair Powell's Speech | Bull Run in XAUUSD ?

Gold Price Analysis on the Daily Chart

When we look at gold on the daily chart, it's clear that the price is currently facing a strong resistance level. Technically, we should expect some retracement from this point. However, the overall market trend remains strongly bullish.

Potential Selling Points

As the price is approaching a higher time frame resistance, we may consider initiating a sell position between the 2440-2450 level, provided there is strong evidence. This evidence could be a structural shift observed on smaller time frames, such as the 15-minute or 5-minute charts. If such a shift is detected, a sell position can be initiated with a proper stop loss in place.

4-Hour Chart Analysis and Market Structure

When analyzing the market structure on the 4-hour chart, it is clear that gold is in a bullish trend, consistently forming higher highs and higher lows. According to advanced market structure rules, when the market creates higher highs and higher lows (or lower highs and lower lows), it essentially signals a break of structure (BOS). Refer to the appended image for a visual reference.

Points of Interest (POI) for Trading

Whenever the market creates a BOS, we have two points of interest (POI) to join the current trend. Based on the 4-hour market structure, our first POI is between the 2415-2418 levels. If the price approaches this level, we may consider initiating a buy position from here.

Our second POI is between the 2391-2397 levels. If the price breaks the first support and moves downwards, we may see another buying opportunity from our second POI in the 2391-2397 zone.

It's important to note that until the price breaks this last support (2391-2397) as per the 4-hour structure, we will remain bullish. If the price able to break this last support, we may shift our bias from bullish to bearish on the 4-hour frame.

1-Hour Frame Market Structure Analysis for XAUUSD

Potential Trade Setups for Today

Let's analyze the 1-hour frame to identify possible short-term trade setups for today. According to advanced market structure principles, gold is clearly bullish on the 1-hour frame as well.

Key Levels and Trading Zones

In the image below, you can see that the market has formed a bullish break of structure (BOS). Our first trend joining level is at 2414-2418, where there is also an unmitigated order block (OB). According to the rules of Smart Money Concepts (SMC) and advanced market structure, the price needs to test the OB before creating another BOS. Additionally, plotting the Fibonacci retracement for the last bullish swing shows the 50% retracement level within this price zone. This makes it a strong buying zone, and I am confident about initiating a buy position at this level. If the price reaches this zone today or in the coming days, we may look for a buying opportunity here.

On the other hand, our second trend joining level is at 2391-2397. If the price reaches this level, we may see another buying opportunity. However, it's important to note that until the price breaks this last support level on the 1-hour frame, we will remain bullish.

This analysis provides a comprehensive outlook on XAUUSD, combining technical insights with upcoming economic data. It's essential to perform your own analysis and practice on a demo account before engaging in live trading. The market can be unpredictable, and proper preparation is crucial for success.

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Gold Forecast | 16 July | Market Expectations After Fed Chair Powell's Speech | Bull Run in XAUUSD ?