- The price of Gold plunged after better than expected Non-Farm Payrolls data.
- A major downside movement could be activated by a valid breakdown below the uptrend line.
- XAU/USD could try to come back higher as long as it stays above the lower median line (lml).
In our gold forecast we see the price of the yellow metal climbed as much as 1,814.95 today where it has found resistance. After the NFP release, XAU/USD plunged, reaching 1,792.23. At the time of writing, the yellow metal is trading at 1,806. In the short term, it seems undecided as the rate moves somehow sideways.
Earlier, the US and Canadian high-impact indicators brought high volatility and sharp movements. As you already know, the Non-Farm Payrolls indicator was reported at 467K in January far above 110K expected, and compared to revised 510K in December.
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In addition, the Average Hourly Earnings rose by 0.7% exceeding the 0.5% growth expected. Unfortunately for the USD, the US Unemployment Rate surged unexpectedly from 3.9% to 4.0%.
As a first reaction, the price of gold dropped aggressively, but now it has rebounded. The Canadian data had an impact as well.
The Unemployment Rate came in at 6.5% above 6.3% expected, while the Employment Change dropped unexpectedly lower from 54.7K to -200.1K in January below -121.5K expected.
Furthermore, the Ivey PMI came in at 50.7 points below 55.1 estimates.
Gold Forecast: Price Technical Analysis – Bearish Engulfing
Gold found resistance at the ascending pitchfork’s inside sliding line (sl) and now is traded below the minor uptrend line. XAU/USD came back to test and retest it after its aggressive breakdown.
In the short term, it’s trapped between the sliding line (sl) and the lower median line (lml) of the ascending pitchfork. 1,784.90 stands as a static support, as a downside obstacle.
Only a valid breakdown below this level and through the major black uptrend line could really open the door for a larger downside movement.
As long as it stays within the ascending pitchfork’s body and above the immediate support levels, XAU/USD could still try to come back higher.
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