Gold popped off what is now our 3rd tier uptrend line after U.S. Employment Change data printed weaker than analyst estimates. The pullback in employment data yielded knee-jerk selloff in the Dollar, a positive catalyst for gold since it is negatively correlated with the Greenback. However, upward momentum in the EUR/USD and GBP/USD is tempering at the moment, so investors should monitor whether the Dollar continues its downward trajectory as the trading session progresses. We wouldn’t be surprised to see the Dollar to add onto intraday losses considering the level of anticipation heading into today’s release. Investors should keep in mind that the Dollar’s December rally was triggered by a turnaround in U.S. employment data. Hence, today’s dip in employment has understandably resulted in Dollar weakness. Meanwhile, gold is staring down previous January highs with the psychological $1150/oz level hanging nearby.
Technically speaking, gold has multiple uptrend lines serving as technical cushions along with intraday, 1/05, 12/30, and 12/22 lows. On an encouraging note, gold continues to set consecutive higher lows after bottoming out in December, and we are currently unable to form a noteworthy downtrend line. Therefore, gold could have some decent upward mobility should the Dollar weaken further. As for the topside, gold faces technical barriers in the form of 12/17 and 11/18 highs along with the psychological $1150/oz level.
Present Price: $1137.13/oz
Resistances: $1138.89/oz, $1141.33/oz, $1144.84/oz, $1148.91/oz, $1153.17/oz, $1159.25/oz
Supports: $1133.56/oz, $1131.08/oz, $1128.24/oz, $1124.16/oz, $1119.47/oz, $1115.08/oz
Psychological: $1100/oz, $1150/oz, December highs and January lows
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