#Gold,#SILVER,#USDJPY Technical Analysis: 4 MAY 2023

Gold Technical Analysis: Prices Head Towards Record Highs

Investors abandoned the US dollar following the monetary policy decisions of the US Federal Reserve Bank, which helped the XAU/USD gold price to rebound strongly. The gains that reached the $2036 resistance level, at the time of writing the analysis. It is now the closest to breaching the $2048 resistance, the top of mid-April. Overall, the price of gold extended its gains on the back of a weaker US dollar and lower yields amid broader economic uncertainty, as investors digest the recent Federal Reserve decision to raise interest rates.

Prior to this, XAU/USD gold prices fell briefly after data showed that US private employers boosted hiring in April, but quickly reversed course with 10-year Treasury yields falling and the dollar index down 0.5%.

For his part, Bob Haberkorn, senior market analyst at RGO Futures, said in a note to Reuters: “If they indicate a pause in raising interest rates, then the price of gold should rise significantly, or if they indicate a continuation of the rise, then it is likely that it will be sold.” gold. Bullion prices gained 1% last month as the US banking crisis prompted a flight to safety.

Commenting on market performance. “The gold price is caught between growing concern about the US banking crisis and uncertainty about the Fed's position, but difficulties surrounding a bipartisan debt ceiling agreement have the potential to provide further support,” said Ricardo Evangelista, senior analyst at ActivTrades.

Gold price forecast today:

• The stability of the XAU/USD gold price is still above the psychological resistance at $2000 an ounce.
  This supports the strength of the bullish trend.
• With the decline in the price of the US dollar following the decisions of the US Federal Reserve, the bulls may find the opportunity to breach important record highs of 2048 and 2070 dollars, respectively.

On the other hand, according to the performance on the daily chart below, the gold price will not give up its bullish outlook without returning to the vicinity of the $1985 support level again. The price of gold may remain stable around its gains until the markets and investors react to the interest rate decisions of the European Central Bank today and the US job numbers tomorrow.

Silver Signal: Continues to See Buyers on Dips

The market has shown resilience, and unless it breaks down below the 50-Day EMA, shorting silver is not recommended.

• Silver initially fell during the trading session on Wednesday but found support in the form of the previous pennant marked on the chart.
• The market continues to see upward pressure, and silver captures some of the wealth preservation concerns currently present in the market.
• The $25 level is a large psychological figure that will be monitored closely by traders.

Buy on Each Dip

The market has shown resilience, and unless it breaks down below the 50-Day EMA, shorting silver is not recommended. It is advisable to follow the overall trend and buy small bits and pieces, taking advantage of dips in the market.

Ultimately, silver has found support after initially falling during the trading session on Wednesday. It continues to see upward pressure, and the $25 level is an important psychological figure. Short-term debts could be a good option for buying in the current market, considering the expected volatility over the next few days. Assuming central banks' attitudes remain unchanged, the market is likely to break above the recent high and reach the $27 level. Once the market breaks above the $30 level, a run toward $50 could be possible. Shorting silver is not recommended unless it breaks down below the 50-Day EMA. It is advisable to follow the overall trend and buy small bits and pieces, taking advantage of dips in the market.

Potential signal: I am buying silver on each dip. However, this is a dangerous market at the moment, and position sizing is crucial. On bullish action after all pullback to the sub-$25 level, I am a buyer, and aiming for $25.88.

USD/JPY Technical Analysis: Continuation of Selling Deals

The US Federal Reserve raised interest by a lower percentage, as expected in light of the collapse of US banks, which contributed to investors abandoning the US dollar. Accordingly, the selling of the USD/JPY currency pair continued, with losses that affected the support level 134.83, and its gains before the decision reached 134.83. The resistance level 137.77 is the highest in nearly two months.

However, the Fed's statement on Wednesday provided little indication that the series of rate hikes has made significant progress toward its goal of cooling the economy, labor market and inflation. US inflation has fallen from a peak of 9.1 percent in June to 5 percent in March but is still well above the Federal Reserve's target rate of 2 percent.

“Inflationary pressures continue to rise, and the process of returning inflation to 2 percent still has a long way to go,” Powell added.

High US interest rates contributed to the collapse of three large banks and turmoil in the banking industry. The three failed banks bought long-term bonds that paid lower rates and then quickly lost value as the Fed sent higher rates.

Forecasts of the US dollar against the yen:

• According to the performance on the daily chart below, the continuation of selling the US dollar against the Japanese yen, USD/JPY may push the currency pair towards the support levels 134.55 and 133.80.
• This is the most important for turning the currency pair's view into a bearish one.
• So far, approaching the resistance level of 136.00 will ensure that the bulls remain inside an ascending channel.

Today, the currency pair will be affected by investor sentiment after the US Federal Reserve announced yesterday, then prepare for the next important economic data, the US weekly jobless claims today, and then the announcement of the important US job numbers tomorrow.

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