Gold Forex Trading Insights | Range Zone and Correction Targets | XAUUSD

Gold established a range zone yesterday between 2370 and 2350. Currently, gold is undergoing a downward correction within the context of a short-term uptrend. The correction target may be the support zone between 2342 and 2337. Once gold tests this zone, traders can consider long trades with the first target at 2365 and the second target near the July 5 high of 2392.

Key Support Levels and Trading Strategies

If gold breaks through the 2342 - 2337 support zone, the correction is likely to continue to the next support zone between 2317 and 2310. Within this short-term uptrend, long trades should be considered if the price hits this lower support zone. However, for traders to open short positions, the gold price must breach the 2310 level, which would indicate a reversal of the uptrend.

Federal Reserve Chair Jerome Powell's Economic Outlook

Federal Reserve Chair Jerome Powell emphasized the risks of a weakening labor market to the economy during his testimony to lawmakers on Tuesday. He highlighted that, while high inflation remains a concern, the Fed also recognizes the potential harm to the economy and job market if policy restraint is reduced too late or insufficiently.

Powell stated, "[I]n light of the progress made both in lowering inflation and in cooling the labor market over the past two years, elevated inflation is not the only risk we face." He also warned that lowering interest rates too soon could "stall or even reverse the progress we've seen on inflation." Powell is scheduled to testify before the House Financial Services Committee on Wednesday.

Summary:

Gold is currently in a downward correction within a short-term uptrend, with a range zone established between 2370 and 2350. The correction target is the support zone of 2342 - 2337, where long trades can be considered with targets at 2365 and 2392. If the support zone breaks, the correction may extend to 2317 - 2310, presenting further long trade opportunities. For a trend reversal and short trades, the price must breach the 2310 level. Federal Reserve Chair Jerome Powell highlighted the risks of a weakening labor market and the potential impacts on economic policy, cautioning against premature interest rate cuts.