Fundamental Overview
Gold made a new weekly high yesterday as the price broke above a key level. We have the US NFP and CPI reports ahead and they are going to move the market a lot so the recent breakout could turn into a fakeout pretty easily.
The market’s pricing didn’t change much as roughly two rate cuts for this year remain the base case. The Fed is placing a great deal on inflation progress to proceed with further cuts, so the US CPI report next week is going to have a bigger influence on interest rate expectations.
Nonetheless, a soft NFP report should trigger a dovish market reaction and give gold a boost considering that we’ve seen a pretty strong selloff in the bond market on the repricing of rate cuts. Conversely, a hot report across the board will likely send gold lower with the 2600 support potentially coming under threat.
Gold Technical Analysis – Daily Timeframe
On the daily chart, we can see that gold continues to trade inside the range between the 2600
support and the 2721 resistance. The price is now trading above the middle of the range as the buyers keep on pushing towards the resistance. The sellers, on the other hand, will likely pile in around the resistance or look for a break below the support to target a drop into the major
trendline around the 2500 level.
Gold Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see more clearly the recent break above the middle of the range around the 2660 level with the buyers piling in to position for a rally into the resistance next. The sellers will want to see the price falling back below the 2660 level to position for a drop back into the 2600 support.
Gold Technical Analysis – 1 hour Timeframe
On the 1 hour chart, there’s not much else we can add here as the buyers will keep on stepping in above the 2660 zone, while the sellers will look for a drop below it to target a move back into the support. The red lines define the
average daily range for today.
Upcoming Catalysts
Today, we conclude the week with the US NFP report.
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This article was written by Giuseppe Dellamotta at
www.forexlive.com.
