Reaction to Sharp Decline

One way to think about the current rally is in relationship to the sharp decline that followed the April lower swing high due to similar volatility. The total decline, from high to low, was $17.25, while the current advance when measured from the higher swing low (C) from May 1, was $17.03. Once there is similarity to a prior swing there is the potential for resistance, in this case. Moreover, notice how resistance was seen recently at a top rising parallel trend line. The line parallels the uptrend line that starts from the higher swing low in May and shows symmetry within a rising trend channel.

Resistance Persists

Today’s high provided a third daily test of the line and resistance was seen once again. Once symmetry in the rising channel is confirmed, there is the potential for a pullback or bearish reversal. A decline below Thursday’s low of $74.02 will trigger the bearish shooting star candle and a one-day bearish reversal off identified resistance.

Key support is the 200-Day MA, now at $69.02, while a minimum decline is anticipated to the 38.2% Fibonacci retracement at $70.65. Watch the 200-Day line along with a 50% retracement level at $68.64. Another area to watch for early support is around an AVWAP level at $72.24. It is potentially significant since it is anchored long-term, starting at the April 2024 swing high day.

For a look at all of today’s economic events, check out our economic calendar.

XAU/USD Current price: $3,314.85

• Rallying US equities undermine demand for the bright metal.
• Hawkish comments from Fed officials and risks of higher rates hit Gold.
• XAU/USD retreated from around $3,300 and gains downward traction.

Gold price advanced throughout the first half of the day, but retreated in the American session, towards the current $3,310 a troy ounce area. The XAU/USD advanced on broad US Dollar (USD) weakness, a consequence of the latest United States (US) President Donald Trump round of letters.

Trump announced another series of levies through Truth Social on Wednesday, including a fresh 50% tariff on all copper imports starting August 1, while threatened Brazil with a 50% tax, accusing the country of unfair trade practices and of conducting a “which hunt” against former President Jair Bolsonaro.

The mood, however, changed after Wall Street’s opening, with US indexes rallying and weighing on the safe-haven metal. The USD in the meantime, trades mixed across the FX board, firmer against high-yielding rivals, yet falling vs commodity-linked ones.

Meanwhile, hawkish Federal Reserve (Fed) headlines add to Gold weakness. Following the release of the Federal Open Market Committee (FOMC) meeting Minutes on Wednesday, showing policymakers are in no rush to cut rates, came comments from St. Louis Fed President Alberto Musalem. Musalem noted that the economy is in a good place, but highlighted the risks from tariffs. He noted he expect the effects of tariffs to show on upcoming June data, adding a clearer picture could be seen in the summer.

Finally, JP Morgan CEO, Jamie Dimon, said he would price in a 40%-50% chance of higher US interest rates, adding he believes markets are underestimating the risk of higher US rates.

XAU/USD short-term technical outlook

The daily chart shows that the XAU/USD pair struggles around its daily opening, while still trading between Fibonacci levels. The pair is currently below the 38.2% retracement of the June slide at around $3,325, failing on an early attempt to run beyond the level. The next Fibonacci support, comes at 3,295.50. Other than that, the pair keeps developing below a mildly bearish 20 Simple Moving Average (SMA), currently at around $3,350, while technical indicators remain lifeless just below their midlines.

The near-term picture hints at lower lows ahead. In the 4-hour chart, XAU/USD is piercing a directionless 20 SMA, while the upside remains contained by a bearish 100 SMA in the $3,330 region. Finally, technical indicators gain downward traction within negative levels, reflecting the ongoing slide rather than anticipating another leg lower.

Support levels: 3,295.50 3,287.40 3,274.50

Resistance levels: 3,325.00 3,350.00 3,373.40

European storage levels are also supportive for supply confidence, with stocks at 61% capacity compared to a five-year seasonal average of 70%.

How Do Production and Power Demand Factor Into the Outlook?

Lower-48 dry gas production remains strong at 105.3 Bcf/day (+3.6% y/y), while demand fell to 77.5 Bcf/day (-8.6% y/y), highlighting the near-term oversupply environment.

LNG net flows to U.S. export terminals stand at 15.0 Bcf/day (+0.9% w/w), maintaining steady export demand but insufficient to fully offset domestic oversupply.

Meanwhile, the Edison Electric Institute reported a +1% y/y increase in U.S. electricity output last week, reflecting a positive driver for baseline natural gas demand from utilities, although not enough to overshadow the cooler weather risk.

Market Forecast: Bearish Bias Holding

The near-term outlook remains bearish for natural gas, with the combination of cooler weather forecasts, strong production, and above-average storage builds outweighing steady export and power demand.

A move below $3.149 would reinforce downside momentum toward $2.885, while resistance near $3.574 and the $3.794–$3.800 zone will likely cap rallies unless weather models turn materially hotter.

Traders should remain cautious, with a bearish bias favored into the EIA data release and early next week’s trade.

More Information in our Economic Calendar.

The EURJPY pair didn’t settle above the bullish channel’s resistance at 171.85, due to its neediness to the positive momentum, which forces it to form a temporary rebound by targeting 171.20 level, then begin forming sideways trading attempting to gather the required positive momentum.

To recommend waiting for confirming breaching the current resistance, to reinforce the chances for forming a new bullish attack, to target the positive stations near 172.85 and 173.45, while the breach failure might force it to form a new correctional rebound, to suffer some losses by reaching 170.45 and 169.65.

The expected trading range for today is between 171.20 and 172.85

Trend forecast: Bullish

The EURJPY pair didn’t settle above the bullish channel’s resistance at 171.85, due to its neediness to the positive momentum, which forces it to form a temporary rebound by targeting 171.20 level, then begin forming sideways trading attempting to gather the required positive momentum.

To recommend waiting for confirming breaching the current resistance, to reinforce the chances for forming a new bullish attack, to target the positive stations near 172.85 and 173.45, while the breach failure might force it to form a new correctional rebound, to suffer some losses by reaching 170.45 and 169.65.

The expected trading range for today is between 171.20 and 172.85

Trend forecast: Bullish

Platinum price attempted to face the negative pressures by providing repeated positive closes above 2.00%Fibonacci extended level at $1330.00 level, forming extra support against the bearish correctional attempts.

The stability of the extra support, we will begin preferring the bullish attempts that targets $1375.00, then attempt to press on the barrier near $1420.00, while breaking the current support will force it to suffer extra losses that might extend to $1315.00 and $1301,00.

The expected trading range for today is between $1330.00 and $1375.00

Trend forecast: Bullish

Signs of Strong Demand

Nonetheless, the behavior of crude oil the past couple of days shows demand remains strong. Yesterday, crude oil pulled back to find support at the 200-Day MA and bounced. Notice that the 200-Day MA was shown as resistance on two days last week. Once it is successfully tested as support the rising trend may be ready to proceed. Buyers took back control today, as a higher daily low was established and today’s closing price looks likely to be in the top third of the day’s trading range. Moreover, crude oil looks set to end Tuesday’s session at its highest daily closing price since the beginning of February.

Multiple Signs of Strength

Strength was also shown during the rally on a bullish reversal signal that triggered above the lower swing high at $72.49 last Friday. The breakout was confirmed by a daily close above that level on Friday. Today’s closing price above that level will further confirm strength. In addition, a solid top downtrend line was broken over the past few days.

That breakout will likely be confirmed by today’s closing price above that level. What this shows is that demand for crude oil remains strong. Therefore, a breakout above last week’s high of $76.29 could occur before a deeper pullback. If it does, the lower swing high at $80.76 marks the next upside target.

Double Inside Days

The 200-Day MA remains key near-term support crude oil. If prices stay above that line, the potential for a new high breakout remains. So far, the pattern that has developed is a double inside day. This shows diminishing volatility as the trend takes a rest and gains are digested. Typically, similar patterns can lead to a bullish continuation signal. However, given the wide trading ranges of the past few days, a breakout above the $76.29 high could see another spike in volatility.

For a look at all of today’s economic events, check out our economic calendar.

Bullish Above $3,346 to $3,366

An attempt to test support around the lower boundary line of the pennant occurred today. But the day’s low didn’t quite reach it. If the pennant boundaries are maintained, then a rally from the lower area of the pennant could lead to an upside breakout of the pattern. Given the structure of the pennant, an upside breakout could trigger on the next rally, or resistance is seen and followed by a pullback first. A breakout above Tuesday’s high of $3,346 would put natural gas back above the 20-Day MA, as well as the 50-Day line. But a bullish reversal will not be indicated until there is a rise above the recent lower swing high at $3,366.

Upside Pennant Breakout Above $3,451

Although an initial pennant breakout signal will occur on a rally above the top boundary line, the recent swing high of $3,451 should provide a more reliable price level as a swing high will be broken. Gold has been consolidating for several months near the highs of the long-term uptrend. Consolidation has occurred in a relatively bullish position, primarily retaining support above the 38.2% Fibonacci retracement level.

Notice that the pullback low of the pennant at $2,121 in May found support around the 38.2% level, along with the 50-Day MA. And it has not been approached again since then. This shows underlying buying strength being maintained, along with a bullish trend structure.

Bearish Below $3,247

Regardless of the potential for an eventual upside pennant breakout, a drop below last week’s swing low of $3,243 will show weaking and a breakdown of the pennant. That would put gold in a position to retest support around the 38.2% retracement and possibly fall through it to the 50% retracement level at $3,041, if not lower.

For a look at all of today’s economic events, check out our economic calendar.

Bearish Momentum Puts $3.10 Swing Low at Risk

Today’s low was close to hitting the 78.6% level and it may have been close enough to consider it reached. However, given the drop below the trend line and deeper decline below the 200-Day MA, now at $3.42, the $3.10 swing low is at risk of being broken. That would trigger another bearish reversal signal. As noted previously, there is a lower target for natural gas, around $2.97 to $2.95.

That zone consists of an initial target for a falling ABCD pattern (purple) and an AVWAP level measured from the 2024 trend low, respectively. Notice that natural gas reversed from support around the AVWAP line twice previously, once in April and in October 2024.

Lower Trendline is Potential Target

Despite the potential for the $2.97 price area being reached, there is also a long-term uptrend line (purple) that touches an August 2024 swing low at $1.88. Since it is a long-term line it should show signs of support, if approached. The uptrend line is currently a little below the $2.95 AVWAP line but will match that level by the end of July. Keep in mind that trendline signals should be confirmed by other technical signals as there can be more than one placement for the line.

Measured Moves Point Lower

An assessment of previous bearish corrections since the January swing high shows a 31.6% decline from the January swing high and a 32.8% decline from the March 31 lower swing high. Note that the March downswing was the second leg down from the $4.90 trend high. So, the full bearish correction was larger with a 41.7% decline in a relatively short period. A 32.8% drop for the current downswing will complete around $2.79.

For a look at all of today’s economic events, check out our economic calendar.