Source: PaxForex Premium Analytics Portal, Fundamental Insight
Australian and New Zealand trade data came in better than expected, but inflation was hotter than forecast in South Korea. Traders will get more inflation data out of Switzerland and the Eurozone this morning. Other reports that may influence the gold price are trade data out of India and industrial production figures from Brazil. Following yesterday’s disappointing ADP employment data out of the US, which saw a downward revision to the previous month, the focus will shift to US initial jobless claims later in the session.
Tomorrow’s NFP report out of the US will provide another catalyst, and any disappointment can rally gold and other safe-haven assets. US Dollar weakness will boost prices as well, as gold remains priced in the greenback, and both assets enjoy an inverse relationship. Volatility is likely to remain elevated as bulls and bears battle around the psychological 1,800 level.
The forecast for gold remains bullish after the recovery from its flash crash last month. Global economic data has clocked in below expectations for several weeks, and inflationary pressures remain elevated. While the Tenkan-sen and the Kijun-sen entered a sideways trend, the Ichimoku Kinko Hyo Cloud shows signs of rising bullish pressures. The CCI moved into extreme overbought territory before retreating and is expected to push higher once again. Can bulls keep the recovery in gold alive and pressure this precious safe-haven metal into its horizontal resistance area? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Should price action for GOLD/USD remain inside the or breakout above the 1,801.60 to 1,833.55 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1,811.50
- Take Profit Zone: 1,902.90 – 1,916.40
- Stop Loss Level: 1,790.00
Should price action for GOLD/USD breakdown below 1,801.60, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1,790.00
- Take Profit Zone: 1,717.70 – 1,739.90
- Stop Loss Level: 1,801.60
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