Current trend

The XAU/USD pair is declining, correcting around 1919.58 after Friday's growth caused by the publication of the June report on the US labor market. Nonfarm Payrolls did not live up to analysts' expectations and increased only by 209.0 thousand after 306.0 thousand in the previous month, while analysts had expected an increase of 225.0 thousand. At the same time, the Unemployment Rate fell from 3.7% to 3.6%, coinciding with the average estimate of analysts, and the Average Hourly Earnings was 4.4% against the previous figure of 4.3%, which was then revised to 4.4%.

Uncertain statistics on the US labor market led experts to revise their forecasts regarding further tightening of monetary policy by the US Federal Reserve. It should be noted, however, that this forecast concerns only the second expected increase in borrowing costs this year. At the July meeting, analysts still expect an interest rate adjustment of 25 basis points with a 90.0% probability. The ongoing uncertainty in the market, expressed in the decline of stock indices on fears about the state of the global economy, is forcing investors to keep protective assets in their portfolios.

On Wednesday, June data on consumer inflation will be published, which may also affect the future decision of the US regulator. In the previous month, the indicator slowed to 4.0%, which is still well above the target levels of 2.0%. In addition, the publication of the so-called "Beige Book", a monthly economic review from the US Federal Reserve, is expected on this day.

Support and resistance

On the D1 chart, Bollinger Bands are gradually reversing horizontally. The price range is narrowing, reflecting ambiguous dynamics of trading in the short term. MACD indicator is growing, while preserving a rather stable buy signal (located above the signal line). Stochastic reversed into a horizontal plane again after a short decline last week. To open new positions, it is necessary to wait for the trade signals to become clear.

Resistance levels: 1930.00, 1940.00, 1952.53, 1960.00.

Support levels: 1915.00, 1907.55, 1900.00, 1892.75.

Trading tips

Short positions may be opened after a breakdown of 1915.00 with the target at 1900.00. Stop-loss — 1923.00. Implementation time: 1-2 days.

The return of the "bullish" trend with the breakout of 1930.00 may become a signal for new long positions with the target of 1945.00. Stop-loss — 1920.00.