Current trend

This week, the quotes of the XPT/USD pair fell to the area of 906.25 (Murrey level [1/8]).

Pressure on precious metals was exerted by the publication of July data from the American labor market on Friday: the growth in unemployment to 4.3% and a decrease in employment rate to 114.0 thousand against the background of maintaining peak interest rates by the US Federal Reserve, as well as signs of weakening of the Chinese economy, caused market participants to fear the onset of a global recession. In these circumstances, investors turned to the dollar as a more traditional safe haven asset. Nevertheless, most experts believe that a serious cooling of the labor market can accelerate the pace of monetary policy easing: if a two-fold adjustment was previously expected, now analysts believe in a three-fold reduction in the cost of borrowing, while the first of them will take place in September and may amount to 50 basis points at once, rather than 25 basis points, as predicted before. If the forecast is confirmed, the economy will receive significant support, and assets alternative to the dollar, including metals, will resume growth.

Support and resistance

Technically, the asset is moving within the medium-term downward channel. The key mark for the "bears" remains 906.25 (Murrey level [1/8]), consolidating below which will allow quotes to develop downward dynamics towards the targets of 875.00 (Murrey level [0/8]) and 843.75 (Murrey level [1/8]). To change the current trend and resume significant growth, the instrument needs to consolidate above 968.75 (Murrey level [3/8], 50.0% Fibonacci retracement), supported by the central line of Bollinger Bands, the breakout of which will ensure the continuation of upward dynamics to the levels of 1031.25 Murrey level [5/8], 23.6% Fibonacci retracement) and 1062.50 (Murrey level [6/8]).

Technical indicators so far confirm the possibility of further decline: Bollinger Bands and Stochastic are pointing downwards, MACD is increasing in the negative zone.

Resistance levels: 968.75, 1031.25, 1062.50.

Support levels: 906.25, 875.00, 843.75.

Trading tips

Short positions should be opened below the level of 906.25 with targets of 875.00, 843.75 and stop-loss around 928.00. Implementation period: 5–7 days.

Long positions can be opened above the 968.75 mark with targets of 1031.25, 1062.50 and stop-loss around 947.65.