- XAU/USD turned to the downside after finding resistance at the R1.
- The 1,824 and the uptrend line represent downside targets.
- The US data could bring sharp movements later today.
The gold price turned to the upside after yesterday’s massive drop. A temporary rebound was natural, but the downside pressure remains high after we reported positive data in the last session.
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The price is trading at $1,836 at the time of writing, below today’s high of $1,840. As you already know, the yellow metal resumed its new sell-off after the FOMC meeting Minutes.
Fundamentally, the US data boosted the greenback yesterday and pushed the XAU/USD toward new lows. The ADP Non-Farm Employment Change came in at 235K versus the 152K expected and above 182K in the previous reporting period. Furthermore, the Unemployment Claims, Trade Balance, and Final Services PMI also came in better than expected.
Today, the US is to release more high-impact data. The Non-Farm Employment Change is expected at 200K in the last month versus 263K in November. The Unemployment Rate could remain steady at 3.7%, the Average Hourly Earnings indicator may report a 0.4% growth, while ISM Services PMI could drop to 55.0, signaling a slowdown in expansion.
The Canadian Unemployment Rate and Employment Change data will be published as well. So, the fundamentals should move the markets today. That’s why you need to be careful. I expect sharp movements around the US data dump in both directions.
Gold price technical analysis: Temporary rebound
Technically, the XAU/USD found demand above $1,824, and it rebounded, trying to retest the broken uptrend line. It has found resistance at the weekly R1 (1,839), and now it has turned to the downside again.
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This could represent only a temporary rebound. As long as it stays within the descending pitchfork’s body, the bias is bearish, so the rate could approach and reach new lows. The 1,824 and the next uptrend line represent downside targets.
Testing the downside obstacles may result in a new leg higher in the short term. A larger drop could be activated only after making a valid breakdown below these support levels.
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