Gold, Silver, USD/JPY Technical Analysis Ahead of Inflation Data

Gold (XAU) and Silver (XAG) have moved lower after several days of consolidation at resistance levels. The market anticipates a 25 basis point rate cut in November and December. While the US dollar has recently surged, gold and silver have not experienced sharp corrections. This is likely due to the ongoing conflict between Iran and Israel, fueling safe-haven demand for both metals.

Inflation data is scheduled to be released on Thursday, and it will likely influence the future direction of these metals. However, the data is not expected to trigger speculation of significant rate cuts. As a result, geopolitical uncertainty is expected to remain the primary driver for gold and silver in the short term.

On the other hand, USD/JPY has bounced from the daily support of around $140 due to the strength of the US dollar. However, the pair has hit the resistance area and is looking for further direction. The geopolitical crisis in the Middle East will likely increase the safe-haven demand for JPY. This demand may limit further upside in the pair. Additionally, the odds of an interest rate hike by the Bank of Japan in 2024 are diminishing. This scenario is preventing strong buying interest in the currency.

Gold (XAU) Technical Analysis

Gold Daily Chart – Break from Triangle to Find Support

The price breaks below this triangle and looks to find support for the next upside rally. A break below $2,600 could push the price down to the support levels of $2,580 and $2537. These support levels are defined by the black dotted trend line and 50 SMA. Interestingly, the 50 SMA intersects with the ascending broadening wedge pattern. Overall, the daily trend remains upward. The gold price will likely continue trading within the ascending broadening wedge pattern as identified by black trend lines in the daily chart.

On the other hand, a break above $2686 will take the price towards the $2750 region. The RSI indicates that gold prices will likely find support soon for the next upside rally.

Gold 4-Hour Chart – Support at the Rising Channel

The gold market is trading within a rising channel on the 4-hour chart. The price breaks out of the black triangle pattern, with solid support at $2,604 and $2,585. The red channel line defines this support. The RSI is trading near the oversold region and indicates the potential bottom soon.

Silver (XAG) Technical Analysis

Silver Daily Chart – Inverted Head and Shoulders within Rising Channel

The silver price is trading within a rising channel on the daily chart. The price forms an inverted head and shoulders pattern within this rising channel. A break above $32.50 could push the price towards the $38-$40 range, which is defined by the resistance of the rising channel. The overall trend remains bullish as long as silver remains above the 50-day SMA.

Silver 4-Hour Chart –Upward Trend Supports Price

Silver remains bullish on the 4-hour chart as the price is trading within an upward channel. The recent correction is approaching to the support level at the red arrow. The next support lies at the channel support at $29.20. The RSI is approaching the oversold territory, indicating that silver prices are nearing a short-term bottom.

USD/JPY Technical Analysis

USD/JPY Daily – Approaching Near the Resistance Level

The overall trend for USD/JPY remains bearish as the price trades below the 200-day SMA. However, the price is approaching the 149 resistance level which is stretched from the August 15th high.

The pair has closed above the 38.2% Fibonacci retracement level of the July high to the September low. This closure opens the door for further upside towards the 50% Fibonacci retracement at 150.706. However, the price will drop after reaching the 50% retracement level.

USD/JPY 4-Hour Chart – Short-Term Upward Trend

USD/JPY has been trading within an upward channel on 4-hour chart. The daily reversal candle on Monday indicates some bearish pressure at this resistance level. A break below 147.38 at the red trend line will confirm the downside move. The RSI on 4-hour chart suggests that a price correction might develop in the short term at these levels.