Gold Trades a Bullish Bat Pattern – Is It Going To Violate Today?

Traders, it’s an NFP week and as we all know, the U.S. labor market report has predicted a more positive outlook compared to the previous month. Is this going to have any impact on gold? Let’s find out…

Gold – XAUUSD – Fundamental Outlook

As we know, the nonfarm employment change is one of the most awaited economic events and the markets get extremely volatile due to its’ release. During the previous month, the U.S. economy disappointed with only 103K jobs which placed a bearish impact on gold. However, this month’s figure is expected to rise to 185K along with a positive forecast of 4% unemployment rate.

The positive forecast is likely to build a bullish sentiment for the dollar and as a result, gold is being traded bearishly. We can expect the same kind of behavior until the NFP figures are published.

Gold – XAU/USD – Technical View

At the moment, gold is trading sideways on a tight trading range of $1,316 – $1,324. Looking at the 4-hour chart, gold is trading below 50- period EMA (exponential moving average) which is signifying a bearish trend. If the trend is bearish, we should also look for a bearish entry. Makes sense? Well, in this scenario, we should wait for a bearish breakout.

Moreover, the bullish bat pattern has just completed C to D wave near $1,316, which is signifying the strength of this level. On the violation of $1,316, gold could drop to $1,309. Whereas, above $1,317 we can see a pullback of up to $1,322. Make sure to check our weekly gold & crude oil weekly news for long-term positions. 

Gold – XAU/USD – Trading Plan

I will be looking into entering another sale position on the violation of $1,316 to target $1,312 today. Good luck!