Geopolitics has once again reared its head in global markets benefiting Gold the most among the different asset classes. In the middle-east Hezbollah is warning of a wider regional conflict warning Cyprus that it could be a target if it provides any assistance to Israel as the Lebanon based terror group and the IDF continue to exchange blows. Of possibly greater concern for the US and Japan however is a new deal between Russia and North Korea that could see Russia providing technology transfers to the rogue nuclear state even as the latter provides the former munitions for its war in Ukraine.
Resistance
- 2407.08 – Intraday Consolidation Floor
- 2387.70 – Right Shoulder / June High
- 2369.39 – Intraday Consolidation Floor
Support
- 2344.08 – 50D Moving Average
- 2326.20 – Intraday Consolidation Floor
- 2310.12 – Intraday Consolidation Low
Given the strong close in the daily chart, XAUUSD’s breakout appears set to invalidate the two month long head and shoulder breakout from the start of the month courtesy of geopolitics. Along with the bullish breakout and push through the 50D Moving Average line we have daily oscillators going overbought. Intraday we may be forming a flag in the 4H picture suggesting we look to a push past yesterday’s high as a bullish entry. Personally I would prefer seeing long tails in the hourly charts coming off 2344.08.
