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Gold sellers look for conviction ahead of US NFPAfter breaking an ascending support line from late June, now resistance, gold bears battle 200-HMA amid cautious market sentiment ahead of the US Nonfarm Payrolls (NFP) data. It’s worth noting that the sluggish MACD and downbeat RSI adds to the trading filters. Even so, hawkish expectations from the data may firm the tapering woes and back gold sellers should they manage to conquer the immediate support of $1,799. It’s worth noting that the 23.6% Fibonacci retracement will raise bars for the commodity’s further downside near $1,789, a break of which will recall $1,765 and $1,750 to the chart. It’s worth noting that a negative surprise, followed by a sustained run-up beyond the support-turned-resistance near $1,805, will aim for the triple tops around 50% Fibonacci retracement level, close to $1,834. In a case where the gold buyers manage to cross $1,834, the mid-June’s swing high, close to $1,869, as well as the $1,900 round figure, will be on their radars.
OANDA:XAUUSDShort
by MTradingGlobal
Markets eye US, Canadian job data The Canadian dollar is steady in Friday trade, after sustaining considerable losses a day earlier. In the North American session, USD/CAD is trading at 1.2118, up 0.11% on the day. The US dollar was broadly higher on Thursday, as the Fed surprised the markets when it announced that it will begin to scale back its portfolio. The Fed ended its purchase of corporate bonds in 2020, and will now gradually sell these assets. The Fed has taken pains to emphasise that this sale is not a monetary policy action, as it does not affect the purchase of government bonds. The latter is intended to improve economic conditions and keep borrowing costs at ultra-low levels. Still, this most recent move has boosted the US dollar, as it appears to signal a move towards tapering QE and potentially raising interest rates. More Fed members are coming out and publicly urging the Fed to hold a discussion about tapering, and this has investors keeping a sharp eye on inflation and employment figures, which could be instrumental in any Fed decision with regard to tapering. The market will quickly shift focus from the Fed to the US employment report (12:e30 GMT). The consensus stands at 644 thousand, which would be a strong acceleration from the April release of 266 thousand. However, the markets are well aware that recent forecasts for NFP have been wide of the mark, including the April reading, as the consensus was 990 thousand. This week's ADP Employment Report showed a gain of 978 thousand, crushing the estimate of 645 thousand. However, the APDP reading is not a reliable indication of how official nonfarm payrolls will perform. Canada will also release key job data (12:30 GMT), with the market expecting soft numbers. April was dismal, as the economy shed 207.1 thousand jobs. May is expected to show a small decline of 20.0 thousand. The unemployment rate is projected to edge up to 8.2%, down from 8.1% USD/CAD is putting pressure on resistance at 1.2137. This line was tested last week. This is followed by resistance at 1.2195. With the pair moving higher, 1.2025 has some breathing room as support. Below, there is support at 1.1971
by OANDA
Gold sellers brace for a bumpy drive on NFP dayThe heaviest fall since late February couldn’t beat gold buyers as the metal stays above the key support line from March 31, near $1,851, on the key US NFP release day. Additionally important are the speeches of US President Joe Biden and Fed Chairman Jerome Powell. It should be noted that while MACD and RSI flash contrasting signals, bears will have a bumpy road even if they manage to break the $1,851 support. The reason could be traced to the monthly horizontal line and multiple tops marked from late April, respectively around $1,843 and $1,800 threshold. Meanwhile, a corrective pullback will have to cross the 100-SMA level of $1,878 before targeting the $1,889-90 resistance area. It should, however, be noted that the $1,900 round figure and the latest high near $1,916 will act as extra filters to the north-run targeting the yearly top close to $1,960. Overall, gold’s uptrend is challenged but bulls aren’t out of the woods.
OANDA:XAUUSDLong
by MTradingGlobal
New Zealand dollar slide continuesThe New Zealand dollar has recorded losses for a third straight day. In the European session, NZD/USD is trading at 0.7212, down 0.33% on the day. The ANZ Commodity Price Index climbed 1.3% in May, marking an eighth consecutive rise. The index rose to a record level, as commodity prices rose in all major categories. The rise in commodities this year is in sharp contrast to 2020, when the Covid pandemic caused a sharp downturn in the global economy. This was reflected in a sharp fall in commodity prices, as the Commodity Price Index recorded declines throughout most of 2020. As Covid rates fall, major economies have been reopening, and improving economic conditions have led to speculation that central banks may respond by tightening policy. The Bank of Canada recently tapered its QE programme and the Reserve Bank of New Zealand surprised the markets last week when it signalled the potential of a rate hike in the second half of 2022. If the RBNZ continues to send a hawkish message to the markets, we can expect the New Zealand dollar to gain ground. This week's key event is the US nonfarm payroll release for May on Friday (12:30 GMT). The market is projecting a strong release, with a consensus of 664 thousand. If the upcoming release is within expectations, it would indicate a significant acceleration from the April reading of 266 thousand. The April release was a massive miss, as the forecast stood at 966 thousand. Investors can be expected to be cautious ahead of the release. If the nonfarm payroll release is as strong as expected, we could see a breakout in the forex markets on Friday. Investors will also be keeping an eye on wage growth, which could put a damper on the NFP party. Average Hourly Earnings is projected to slow to 0.2% in May, after a sharp gain of 0.7% previously. There is resistance at 0.7777 and 0.7846. On the downside, we have support at 0.7658 and 0.7608
by OANDA
EURUSD bears embrace for further downside ahead of US NFPWith Fed’s Powell joining the league of the ECB policymakers to placate the bond bears, who ultimately failed, EURUSD bears cheer downside break of 100-day SMA for the first in over four months. However, February lows seem to question the further weakness of the pair ahead of the key US employment data for February, led by the NFP. While it is mostly expected to keep the US dollar on the front foot, a horizontal area since October 2021, around 1.1890-80, followed by the 200-day SMA level of 1.1800, will be the tough nuts to crack for the sellers. Meanwhile, any corrective pullback needs not only to cross the 100-day SMA level of 1.2030 but the previous support line from November, at 1.2050, to convince EURUSD buyers. Should the US dollar fail to recover around 1.2050, 1.2185 and February’s top near 1.2245 will be in the spotlight. Overall, EURUSD is ready to challenge the medium-term uptrend but needs validation from today’s US jobs report.
Short
by MTradingGlobal
Gold bears brace for $1,765 on NFP dayNot only a downside break of an ascending trend line from March but a daily closing below 200-day EMA and January low also favor gold bears on Friday. Although the pre-NFP trading dullness triggered consolidation from a nine-week low, the yellow metal keeps the previous day’s breakdown of the key technical levels. As a result, the bullion sellers currently eye a horizontal area including March 2020 top and November 2020 high around $1,765. It should, however, be noted that the quote’s further weakness past-$1,765 will attack the $1,700 threshold while eyeing the June 2020 bottom surrounding $1,695. Meanwhile, an upside clearance of 200-day SMA, at $1,821 now, will target the previous support line from March 20, 2020, around $1,845-50. It’s worth mentioning that the double tops marked in January near $1,875 also become the key hurdle to watch for gold buyers during the recovery moves, which are less anticipated. Overall, gold traders should keep their bearish bias but a fresh position can wait for the US employment data for January, up for publishing around 13:30 GMT.
OANDA:XAUUSDShort
by MTradingGlobal