- Gold price has failed to recapture the psychological resistance of $1,800.00.
- The DXY is gaining strength despite the downbeat expectations for the US NFP.
- JP Morgan has slashed the consensus for the US NFP to 200k.
Gold price (XAU/USD) has slipped below $1,790.00 after failing to punch the psychological resistance of $1,800.00 in the Asian session. The precious metal formed a short-lived double top and a slight correction is highly expected by the market participants.
Meanwhile, the US dollar index (DXY) has displayed a stellar performance after the open despite the downbeat estimates for the US labor market data. After the consensus of 250k job addition in the month of July, economists at JP Morgan predict the US Nonfarm Payrolls (NFP) to come in weaker at 200K in July’s labor market report. In the month of June, the US economy added 372k jobs in the labor market. A continuous slash in job creation data is advocating severe pressure on the labor market. However, the Unemployment rate will remain stable at 3.6%.
Rising interest rates and their multiplier effects have triggered downside risks in the labor market activities. The corporate players are unable to invest unhesitatingly due to costly dollars. Therefore, lower investment opportunities are unable to accelerate the employment generation process.
Gold technical analysis
On a four-hour scale, the gold price has faced barricades while attempting a break of the Rising Channel on the upside. The upper portion of the above-mentioned chart pattern is plotted from July 22 high at $1,739.37 while the lower portion is placed from July 21 low at $1,681.87.
The precious metal is confidently established above the 50-and 200-period Exponential Moving Averages (EMAs) at $1,759.62 and $1,765.06 respectively, which adds to the upside filters.
Also, the Relative Strength Index (RSI) (14) is holding itself in the bullish range of 60.00-80.00, which indicates that the bullish momentum is still intact.
Gold four-hour chart